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CANADIAN DOLLAR EQUIVALENT OF U.S. $35,000,000
CREDIT AGREEMENT
dated as of October 12, 2001,
among
MARKWEST RESOURCES CANADA CORP.,
as the Borrower,
and
CERTAIN FINANCIAL INSTITUTIONS,
as the Lenders,
and
BANK OF AMERICA CANADA,
as the Canadian Administrative Agent for the Lenders
--------------------
BANC OF AMERICA SECURITIES LLC,
as Lead Arranger and Sole Book Manager
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TABLE OF CONTENTS
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Page
ARTICLE I DEFINITIONS AND ACCOUNTING TERMS......................................................1
SECTION 1.1 Defined Terms.........................................................................1
SECTION 1.2 Use of Defined Terms.................................................................22
SECTION 1.3 Cross-References.....................................................................23
SECTION 1.4 Accounting and Financial Determinations..............................................23
ARTICLE II COMMITMENTS, BORROWING PROCEDURES AND NOTES..........................................23
SECTION 2.1 Commitments..........................................................................23
SECTION 2.1.1 Revolving Loan Commitment............................................................23
SECTION 2.1.2 Commitment to Issue Letters of Credit................................................23
SECTION 2.1.3 [Intentionally Left Blank]...........................................................23
SECTION 2.1.4 Term Loan Commitment.................................................................23
SECTION 2.1.5 Lenders Not Required To Make Loans or Issue or Participate in Letters of Credit......24
SECTION 2.1.6 Increase in Revolving Loan Commitment Amount.........................................24
SECTION 2.2 Optional Reduction of Commitment Amount..............................................26
SECTION 2.3 Borrowing Procedure..................................................................26
SECTION 2.4 Continuation and Conversion Elections................................................26
SECTION 2.5 Notes................................................................................27
SECTION 2.6 Letters of Credit....................................................................27
SECTION 2.6.1 Issuance Requests....................................................................27
SECTION 2.6.2 Issuances and Extensions.............................................................28
SECTION 2.6.3 Other Lenders' Participation.........................................................28
SECTION 2.6.4 Disbursements........................................................................29
SECTION 2.6.5 Reimbursement........................................................................29
SECTION 2.6.6 Deemed Disbursements.................................................................30
SECTION 2.6.7 Nature of Reimbursement Obligations..................................................31
SECTION 2.6.8 Increased Costs; Indemnity...........................................................31
SECTION 2.7.1 Extension of Continuation Date.......................................................32
SECTION 2.7.2 Continuation as Term Loan............................................................33
SECTION 2.7.3 Non-Accepting Lender.................................................................33
ARTICLE III REPAYMENTS, PREPAYMENTS, INTEREST AND FEES...........................................34
SECTION 3.1 Repayments and Prepayments...........................................................34
SECTION 3.1.1 Optional Prepayment..................................................................34
SECTION 3.1.2 Mandatory Prepayment; Currency.......................................................35
SECTION 3.1.3 Mandatory Prepayment on Acceleration.................................................35
SECTION 3.1.4 Prepayments of Term Loans............................................................35
SECTION 3.2 Interest Provisions..................................................................35
SECTION 3.2.1 Rates................................................................................35
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SECTION 3.2.2 Default Rate.........................................................................35
SECTION 3.2.3 Payment Dates........................................................................36
SECTION 3.2.4 [Intentionally Left Blank]...........................................................36
SECTION 3.3 Fees.................................................................................36
SECTION 3.3.1 Commitment Fee.......................................................................36
SECTION 3.3.2 Canadian Administrative Agent's Fee..................................................36
SECTION 3.3.3 Letter of Credit Fees................................................................36
ARTICLE IV CERTAIN LIBO RATE AND OTHER PROVISIONS...............................................37
SECTION 4.1 Fixed Rate Lending Unlawful..........................................................37
SECTION 4.2 Deposits Unavailable.................................................................37
SECTION 4.3 Increased LIBO Rate Loan Costs, etc..................................................37
SECTION 4.4 Funding Losses.......................................................................38
SECTION 4.5 Increased Capital Costs..............................................................38
SECTION 4.6 Taxes................................................................................38
SECTION 4.7 Payments, Computations, etc..........................................................39
SECTION 4.8 Sharing of Payments..................................................................40
SECTION 4.9 Setoff...............................................................................40
SECTION 4.10. Currency Conversion and Currency Indemnity...........................................41
ARTICLE V CONDITIONS TO BORROWING..............................................................41
SECTION 5.1 Initial Borrowing....................................................................41
SECTION 5.1.1 Resolutions, etc.....................................................................42
SECTION 5.1.2 Delivery of this Agreement;..........................................................42
SECTION 5.1.3 Guaranty Agreements..................................................................42
SECTION 5.1.4 Collateral Documents.................................................................42
SECTION 5.1.5 Closing Certificate..................................................................42
SECTION 5.1.6 Opinions of Counsel..................................................................43
SECTION 5.1.7 Closing Fees, Expenses, etc..........................................................43
SECTION 5.1.8 Evidence of Insurance................................................................43
SECTION 5.1.9 Projections..........................................................................43
SECTION 5.1.10 Title................................................................................43
SECTION 5.1.11 Initial Reserve Report...............................................................43
SECTION 5.1.12 Environmental Reports................................................................44
SECTION 5.1.13 Financial Statements.................................................................44
SECTION 5.1.14 Incentive Payments Agreement.........................................................44
SECTION 5.1.15 Hedging Agreements...................................................................44
SECTION 5.1.16 Other................................................................................44
SECTION 5.2 Conditions Precedent to Term Loan....................................................44
SECTION 5.2.1 Revolving Loans Continued as Term Loans..............................................45
SECTION 5.2.2 Confirmatory Certificate.............................................................45
SECTION 5.3 All Borrowings.......................................................................45
SECTION 5.3.1 Compliance with Warranties, No Default, etc..........................................45
SECTION 5.3.2 Borrowing Request....................................................................45
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SECTION 5.3.3 Satisfactory Legal Form..............................................................46
ARTICLE VI REPRESENTATIONS AND WARRANTIES.......................................................46
SECTION 6.1 Organization, etc....................................................................46
SECTION 6.2 Due Authorization, Non-Contravention, etc............................................47
SECTION 6.3 Government Approval, Regulation, etc.................................................47
SECTION 6.4 Validity, etc........................................................................47
SECTION 6.5 Financial Information................................................................47
SECTION 6.6 No Material Adverse Change...........................................................47
SECTION 6.7 Litigation, Labor Controversies, etc.................................................48
SECTION 6.8 Subsidiaries.........................................................................48
SECTION 6.9 Ownership of Properties..............................................................48
SECTION 6.10 Taxes................................................................................48
SECTION 6.11 [Intentionally Left Blank]...........................................................48
SECTION 6.12 Compliance with Law..................................................................48
SECTION 6.13 Claims and Liabilities...............................................................48
SECTION 6.14 No Prohibition on Perfection of Collateral Documents.................................49
SECTION 6.15 Solvency.............................................................................49
SECTION 6.16 Environmental Warranties.............................................................49
SECTION 6.17 Regulations T, U and X...............................................................50
SECTION 6.18 Accuracy of Information..............................................................50
SECTION 6.19 Default..............................................................................51
SECTION 6.20 [Intentionally Left Blank]...........................................................51
SECTION 6.21 Oil and Gas Reserves.................................................................51
SECTION 6.22 Initial Reserve Report; Title Opinion................................................51
ARTICLE VII COVENANTS............................................................................52
SECTION 7.1 Affirmative Covenants................................................................52
SECTION 7.1.1 Financial Information, Reports, Notices, etc.........................................52
SECTION 7.1.2 Compliance with Laws, etc............................................................54
SECTION 7.1.3 Maintenance of Properties............................................................54
SECTION 7.1.4 Use of Proceeds......................................................................55
SECTION 7.1.5 Insurance............................................................................55
SECTION 7.1.6 Books and Records....................................................................56
SECTION 7.1.7 Environmental Covenant...............................................................56
SECTION 7.1.8 Further Assurances; Additional Collateral; Recording of Liens........................56
SECTION 7.1.9 Compliance with Hedging Policy; Hedging Agreements...................................58
SECTION 7.1.10 Hedging Agreements...................................................................58
SECTION 7.1.11 Performance of Obligations...........................................................58
SECTION 7.1.12 Payment of Taxes and Claims..........................................................58
SECTION 7.2 Negative Covenants...................................................................58
SECTION 7.2.1 Business Activities..................................................................59
SECTION 7.2.2 Indebtedness.........................................................................59
SECTION 7.2.3 Liens................................................................................59
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SECTION 7.2.4 Financial Covenants..................................................................62
SECTION 7.2.5 Investments..........................................................................63
SECTION 7.2.6 [Intentionally Left Blank]...........................................................64
SECTION 7.2.7 Rental Obligations...................................................................64
SECTION 7.2.8 Consolidation, Merger, etc...........................................................64
SECTION 7.2.9 Asset Dispositions, etc..............................................................64
SECTION 7.2.10 Subordinated Debt Documents..........................................................65
SECTION 7.2.11 Transactions with Affiliates.........................................................65
SECTION 7.2.12 Negative Pledges, Restrictive Agreements, etc........................................65
SECTION 7.2.13 Amendments to Incentive Payments Agreement...........................................66
SECTION 7.2.14 Use of Proceeds......................................................................66
ARTICLE VIII EVENTS OF DEFAULT....................................................................66
SECTION 8.1 Listing of Events of Default.........................................................66
SECTION 8.1.1 Non-Payment of Obligations...........................................................66
SECTION 8.1.2 Breach of Warranty...................................................................67
SECTION 8.1.3 Non-Performance of Certain Covenants and Obligations.................................67
SECTION 8.1.4 Non-Performance of Other Covenants and Obligations...................................67
SECTION 8.1.5 Default Under Other Indebtedness or U.S. Credit Agreement............................67
SECTION 8.1.6 Judgments............................................................................67
SECTION 8.1.7 Default under Parent Guaranty........................................................68
SECTION 8.1.8 Control of the Borrower..............................................................68
SECTION 8.1.9 Bankruptcy, Insolvency, etc..........................................................68
SECTION 8.1.10 Impairment of Security, etc..........................................................68
SECTION 8.1.11 Default Under Material Agreement.....................................................69
SECTION 8.1.12 Invalidity of Loan Documents.........................................................69
SECTION 8.2 Action if Bankruptcy.................................................................69
SECTION 8.3 Action if Other Event of Default.....................................................69
ARTICLE IX THE AGENT............................................................................70
SECTION 9.1 Actions..............................................................................70
SECTION 9.2 Funding Reliance, etc................................................................70
SECTION 9.3 Exculpation..........................................................................71
SECTION 9.4 Successor............................................................................71
SECTION 9.5 Loans by BofA Canada and Bank of America, N.A........................................72
SECTION 9.6 Credit Decisions.....................................................................72
SECTION 9.7 Copies, etc..........................................................................72
SECTION 9.8 Default; Collateral..................................................................73
SECTION 9.9 Lender Hedging Agreements............................................................74
ARTICLE X MISCELLANEOUS PROVISIONS.............................................................75
SECTION 10.1 Waivers, Amendments, Release of Collateral, etc......................................75
SECTION 10.2 Notices..............................................................................76
SECTION 10.3 Payment of Costs and Expenses........................................................77
SECTION 10.4 Indemnification......................................................................77
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SECTION 10.5 Survival.............................................................................78
SECTION 10.6 Severability.........................................................................78
SECTION 10.7 Headings.............................................................................78
SECTION 10.8 Execution in Counterparts............................................................78
SECTION 10.9 Governing Law; Submission to Process.................................................78
SECTION 10.10 Successors and Assigns...............................................................79
SECTION 10.11 Sale and Transfer of Loans and Notes; Participations in Loans and Notes..............79
SECTION 10.11.1 Assignments..........................................................................79
SECTION 10.11.2 Participations.......................................................................80
SECTION 10.12 Other Transactions...................................................................80
SECTION 10.13 Forum Selection and Consent to Jurisdiction..........................................81
SECTION 10.14 Waiver of Jury Trial.................................................................81
SECTION 10.15 Confidentiality......................................................................81
SECTION 10.16 [Intentionally Left Blank]...........................................................82
SECTION 10.17 Priority of Hedging Obligations......................................................82
SECTION 10.18 Certain Remedies.....................................................................82
SECTION 10.19 Maximum Rate.........................................................................82
SECTION 10.20 Entire Agreement.....................................................................84
SECTION 10.21 Annual Rates of Interest.............................................................84
SECTION 10.22 Waiver of Judgment Interest Act (Alberta)............................................84
SECTION 10.23 Deemed Reinvestment Not Applicable...................................................84
</Table>
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SCHEDULES:
Schedule I - Disclosure Schedule
Schedule II - Collateral Documents to Be Delivered
Schedule III - Initial Reserve Reports
Schedule IV - Lender Addresses and Offices
Schedule V - Lender Percentages
EXHIBITS:
Exhibit A - Form of Note
Exhibit B - Form of Borrowing Request
Exhibit C - Form of Continuation/Conversion Notice
Exhibit D - Form of Lender Assignment Agreement
Exhibit E-1 - Form of Legal Opinion of Davis, Graham & Stubbs LLP
Exhibit E-2 - Form of Legal Opinion of Fraser Milner Casgrain LLP
Exhibit E-3 - Form of Legal Opinion of Baker Botts LLP
Exhibit E-4 - Form of Legal Opinion of Barry Spector
Exhibit F - Form of Compliance Certificate
Exhibit G-1 - Form of Parent Guaranty
Exhibit G-2 - Form of Canadian Company Guaranty
Exhibit H-1 - Form of General Security Agreement
Exhibit H-2 - Form of Security Pledge Agreement
Exhibit I - Form of Mortgage
Exhibit J - Form of Issuance Request
Exhibit K - Hedging Policy
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CREDIT AGREEMENT
THIS CREDIT AGREEMENT dated as of October 12, 2001, among MARKWEST
RESOURCES CANADA CORP. (previously known as MarkWest Acquisitions Corp.), an
Alberta corporation (the "BORROWER"), the various financial institutions as are
or may become parties hereto (collectively, the "LENDERS"), and BANK OF AMERICA
CANADA ("BOFA CANADA"), as Canadian administrative agent for the Lenders (in
such capacity, THE"CANADIAN ADMINISTRATIVE AGENT").
W I T N E S S E T H:
WHEREAS, the Borrower is engaged in the business of oil and gas
exploration, production and development and activities related or ancillary
thereto, and natural gas, natural gas liquid and crude oil marketing, and
intends to engage in the business of the acquisition, ownership, operation,
leasing and construction of natural gas processing and treating plants,
fractionation facilities and pipelines, and natural gas, natural gas liquids and
crude oil storage, transportation and terminalling, and activities related or
ancillary to the foregoing;
WHEREAS, MarkWest Hydrocarbon, Inc., a Delaware corporation ("PARENT"),
the Lender therein named (the "EXISTING LENDER"), and Bank of America, N.A., as
Administrative Agent, entered into that certain U.S. Credit Agreement (defined
below), pursuant to which the Existing Lender agreed to make loans in an amount
up to U.S. $130,000,000 (the "EXISTING LOANS") to the Parent;
WHEREAS, the Parent and the Borrower have requested that the Lenders
extend credit to the Borrower for working capital and general corporate purposes
and to repay all or a portion of the Intercompany Loan (defined below); and
WHEREAS, upon and subject to the terms and conditions of this
Agreement, the Lenders are willing to extend such credit to the Borrower.
NOW, THEREFORE, the parties hereto agree as follows:
ARTICLE I
DEFINITIONS AND ACCOUNTING TERMS
SECTION 1.1 DEFINED TERMS. The following terms (whether or not
underscored) when used in this Agreement, including its preamble and recitals,
shall, except where the context otherwise requires, have the following meanings
(such meanings to be equally applicable to the singular and plural forms
thereof):
"ACQUIRED COMPANIES" means the entities acquired by the Borrower
pursuant to the Acquisition Contracts.
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"ACQUISITION" means any transaction or series of related transactions
for the purpose of or resulting, directly or indirectly, in (a) the acquisition
of all or substantially all of the assets of a Person, or of any business or
division of a Person, (b) the acquisition of in excess of 50% of the capital
stock, partnership interests, membership interests or equity of any Person, or
otherwise causing any Person to become a Subsidiary, or (c) an amalgamation,
merger or consolidation or any other combination of the Borrower or a Subsidiary
with another Person (other than a Person that is a Subsidiary).
"ACQUISITION CONTRACTS" means (a) the Share Purchase Agreement dated
August 10, 2001, among the Borrower and the Sellers therein named with respect
to the shares of the Watford Entities and Watford Energy as therein defined, and
(b) the Share Purchase Agreement dated August 10, 2001, between the Borrower and
Kaiser Energy Ltd.
"ADMINISTRATIVE AGENT" means Bank of America, N.A., in its capacity as
agent for the Lenders appointed pursuant to SECTION 9.1, to act in accordance
with the terms of this Agreement and the Intercreditor Agreement, and includes
each other Person as shall have subsequently been appointed as the successor
Administrative Agent pursuant to SECTION 9.4.
"AFFILIATE" of any Person means any other Person which, directly or
indirectly, controls, is controlled by or is under common control with such
Person. A Person shall be deemed to be "controlled by" any other Person if such
other Person possesses, directly or indirectly, power (a) to vote 10% or more of
the securities (on a fully diluted basis) having ordinary voting power for the
election of directors or managing general partners; or (b) to direct or cause
the direction of the management and policies of such Person whether by contract
or otherwise.
"AGENT" means each of the Canadian Administrative Agent and the
Administrative Agent, and "AGENTS" means the Canadian Administrative Agent and
the Administrative Agent, collectively.
"AGREEMENT" means, on any date, this Credit Agreement as originally in
effect on the Effective Date and as thereafter from time to time amended,
supplemented, amended and restated, or otherwise modified and in effect on such
date.
"APPLICABLE MARGIN" means, with respect to any Loan of any type or any
Letter of Credit, and at such time as the Leverage Ratio is in one of the
following ranges, the number of basis points ("B.P.") PER ANNUM for the relevant
type of Loan, Commitment Fee or Letter of Credit and the relevant range set
forth below:
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<Table>
<Caption>
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Leverage Ratio Applicable Margin
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Canadian
Prime Rate
Pricing Level LIBO Rate Loan Letter of Credit Loan Commitment Fee
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1 Less than or equal to 1.0X 150.0 b.p. 150.0 b.p. 37.5 b.p. 25.0 b.p.
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2 Greater than 1.0X but less 175.0 b.p. 175.0 b.p. 62.5 b.p. 30.0 b.p.
than or equal to 2.0X
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3 Greater than 2.0X, but less 200.0 b.p. 200.0 b.p. 87.5 b.p. 37.5 b.p.
than or equal to 2.75X
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4 Greater than 2.75X, but less 225.0 b.p. 225.0 b.p. 112.5 b.p. 50.0 b.p.
than or equal to 3.25X
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5 Greater than 3.25X 250.0 b.p. 250.0 b.p. 137.5 b.p. 50.0 b.p.
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</Table>
The Leverage Ratio shall be determined from the then most recent
monthly financial statements delivered by the Borrower pursuant to
SECTION 7.1.1 and any changes in Applicable Margin shall become
effective the first day of the second month following the date such
financial statements are dated. In the event that the Borrower shall at
any time fail to furnish the Lenders such financial statements required
to be delivered under SECTION 7.1.1, the maximum Applicable Margin as
set forth above shall apply until such time as such financial
statements are so delivered. Changes in the Applicable Margin as a
result of a change in the Leverage Ratio will occur automatically as
aforesaid without notice. The Applicable Margin shall be set at Pricing
Level 4 for the period beginning on the Effective Date and ending on
January 31, 2002, UNLESS during such period the Leverage Ratio falls
within Pricing Level 5, in which case Pricing Level 5 will apply.
"ASSIGNEE LENDER" is defined in SECTION 10.11.1.
"AUTHORIZED OFFICER" means, relative to any Obligor, those of its
officers whose signatures and incumbency shall have been certified to the
Canadian Administrative Agent and the Lenders pursuant to SECTION 5.1.1.
"BANKRUPTCY AND INSOLVENCY ACT (CANADA)" means the BANKRUPTCY AND
INSOLVENCY ACT, S.C. 1992, c. 27, including the regulations made and, from time
to time, in force, under that Act.
"BASIN" means Basin Pipeline L.L.C., a Michigan limited liability
company.
"BOFA CANADA" is defined in the PREAMBLE.
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"BORROWER" is defined in the PREAMBLE.
"BORROWING" means the Loans of the same type and, in the case of LIBO
Rate Loans, having the same Interest Period made by all Lenders on the same
Business Day and pursuant to the same Borrowing Request in accordance with
SECTION 2.1.
"BORROWING REQUEST" means a loan request and certificate duly executed
by an Authorized Officer of the Borrower, substantially in the form of EXHIBIT B
hereto.
"BUSINESS DAY" means (a) any day which is neither a Saturday or Sunday
nor a legal holiday on which banks are authorized or required to be closed in
Dallas, Texas, Denver, Colorado, Toronto, Ontario, or Calgary, Alberta; and (b)
relative to the making, continuing, prepaying or repaying of any LIBO Rate
Loans, any day on which dealings in Dollars are carried on in the interbank
eurodollar market.
"CANADIAN ACQUISITION" means the acquisition by Borrower of the
Acquired Companies pursuant to the Acquisition Contracts.
"CANADIAN ADMINISTRATIVE AGENT" is defined in the PREAMBLE and includes
each other Person as shall have subsequently been appointed as the successor
Canadian Administrative Agent pursuant to SECTION 9.4.
"CANADIAN COMMITMENT PORTION" means at any time (a) during the
Revolving Loan Availability Period, an amount equal to the U.S. Dollar
Equivalent of the Revolving Loan Commitment Amount in effect at such time, and
(b) on and after the Continuation Date, an amount equal to the U.S. Dollar
Equivalent of the Term Loan Principal Debt outstanding at such time.
"CANADIAN COST OF FUNDS RATE" means a rate per annum equal to the cost
of funds of the Canadian Administrative Agent as established by the Canadian
Administrative Agent based on its customary practice.
"CANADIAN DOLLAR EQUIVALENT" means, with respect to an amount
denominated in U.S. Dollars, the amount of Cdn. Dollars required to purchase the
relevant stated amount of U.S. Dollars based on an exchange rate equal to
1.5657.
"CANADIAN PRIME RATE" means on any day a fluctuating rate of interest
per annum equal to the rate of interest per annum most recently announced by the
Canadian Administrative Agent as its reference rate for Canadian Dollar
commercial loans made to a Person in Canada. The Canadian Prime Rate PLUS the
Applicable Margin charged by any Person shall never exceed the Highest Lawful
Rate.
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"CANADIAN PRIME RATE LOAN" means a Loan that bears interest at the
Canadian Prime Rate PLUS the Applicable Margin.
"CANADIAN RATIO" means at any time, an amount equal to (a) the Canadian
Commitment Portion in effect at such time DIVIDED BY (b) an amount equal to the
sum of (i) the U.S. Commitment Portion in effect at such time PLUS (ii) the
Canadian Commitment Portion in effect at such time.
"CANADIAN RESIDENT LENDER" means each Lender identified as such on the
signature pages to this Agreement or any Lender Assignment Agreement executed by
a new Lender, each being a Person that is not a non-resident of Canada for the
purposes of the INCOME TAX ACT (Canada).
"CAPITALIZED LEASE LIABILITIES" of a Person means all monetary
obligations of such Person or any of its Subsidiaries under any leasing or
similar arrangement which, in accordance with GAAP, would be classified as
capitalized leases, and, for purposes of this Agreement and each other Loan
Document, the amount of such obligations shall be the capitalized amount
thereof, determined in accordance with GAAP, and the stated maturity thereof
shall be the date of the last payment of rent or any other amount due under such
lease prior to the first date upon which such lease may be terminated by the
lessee without payment of a penalty.
"CASH COLLATERALIZE" means to pledge and deposit with or deliver to the
Canadian Administrative Agent, for the benefit of the Issuer and the Lenders, as
collateral for the Obligations in respect of Letters of Credit, cash or deposit
account balances pursuant to documentation in form and substance satisfactory to
the Canadian Administrative Agent and the Issuer (which documents are hereby
consented to by the Lenders). Derivatives of such term shall have corresponding
meaning. The Borrower hereby grants the Canadian Administrative Agent, for the
benefit of the Issuer and the Lenders, a Lien on all such cash and deposit
account balances. Cash collateral shall be maintained in blocked, non-interest
bearing deposit accounts at Canadian Administrative Agent or other institutions
satisfactory to it.
"CASH EQUIVALENT INVESTMENT" means, at any time: (a) any evidence of
Indebtedness, maturing not more than one year after such time, issued or
guaranteed by the governments of the United States or Canada; (b) commercial
paper, maturing not more than nine months from the date of issue, which is
issued by (i) a corporation (other than an Affiliate of any Obligor) organized
under the laws of any state of the United States or of the District of Columbia,
or under the laws of any province of Canada, and rated A-1 by Standard & Poor's
Corporation or P-1 by Moody's Investors Service, Inc., or (ii) any Lender (or
its holding company); (c) any certificate of deposit or bankers acceptance,
maturing not more than one year after such time, which is issued by either (i) a
commercial banking institution that is a member of the U.S. Federal Reserve
System or is organized under the laws of Canada, or any province thereof, and in
each case has a combined capital and surplus and undivided profits of not less
than the Canadian Dollar Equivalent of U.S. $250,000,000, or (ii) any Lender or
an Affiliate thereof; (d) any repurchase agreement entered into with any Lender
or an Affiliate thereof (or other commercial banking institution of the stature
referred to in CLAUSE (c)(i)) which (i) is secured by a fully perfected security
interest in any obligation of the type
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described in any of CLAUSES (a) through (c)); and (ii) has a market value at the
time such repurchase agreement is entered into of not less than 100% of the
repurchase obligation of such Lender or Affiliate (or other commercial banking
institution) thereunder; (e) obligations of any state within the United States
of America or any province of Canada, any nonprofit corporation or any
instrumentality of the foregoing, PROVIDED, THAT at the time of their purchase,
such obligations are rated in one of the two highest letter rating categories
(e.g. in the case of Standard & Poor's Corporation, either its AAA or AA
category) by a nationally recognized securities credit rating agency; (f)
obligations issued by political subdivisions or municipalities of any state
within the United States of America or province within Canada, any nonprofit
corporation or any instrumentality of the foregoing, PROVIDED, THAT at the time
of their purchase, such obligations are rated in one of the two highest letter
rating categories (e.g., in the case of Standard & Poor's Corporation, either
its AAA or AA category) by a nationally recognized securities credit rating
agency; or (g) eurodollar deposits with the overseas branch of (i) any
commercial banking institution that is a member of the Federal Reserve System or
is organized under the laws of Canada, or any province thereof, and in each case
has a combined capital and surplus and undivided profits of not less than the
Canadian Dollar Equivalent of U.S. $250,000,000, or (ii) any Lender or an
Affiliate thereof.
"CHANGE IN CONTROL" means (a) the acquisition by any Person, or two or
more Persons acting in concert (other than John Fox and members of his family),
of beneficial ownership (within the meaning of Rule 13d-3 of the Securities and
Exchange Commission under the Securities Exchange Act of 1934) of 30% or more of
the outstanding shares of voting stock of the Parent; or (b) the failure of John
Fox and members of his family to own, free and clear of all Liens or other
encumbrances, at least 25% of the outstanding shares of voting stock of the
Parent on a fully diluted basis.
"CHANGE IN CONTROL (CANADIAN BORROWER)" means the failure of Parent to
directly or indirectly own all of the stock or other equity interests in the
Borrower.
"COLLATERAL" means all of the items and types of property described in
now existing or hereafter created Collateral Documents and cash and non-cash
proceeds thereof.
"COLLATERAL DOCUMENTS" means each guaranty, pledge agreement, security
agreement, mortgage, assignment, and all other security agreements, deeds of
trust, mortgages, chattel mortgages, assignments, pledges, guaranties, financing
statements, continuation statements, extension agreements and other agreements
or instruments previously delivered or now or hereafter delivered by Borrower,
Parent or any of their Subsidiaries to the Canadian Administrative Agent or the
Administrative Agent on behalf of the Lenders or to the Lenders in connection
with this Agreement or any transaction contemplated hereby to secure or
guarantee the payment of any part of the Obligations or the performance of any
other duties and obligations of Borrower under the Loan Documents, whenever made
or delivered.
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"COMMITMENT" means, as the context may require, a Lender's (a)
Revolving Loan Commitment and (b) Term Loan Commitment.
"COMMITMENT FEE" means, on any date, a per annum fee equal to the
commitment fee indicated in the pricing grid set forth in the definition of
Applicable Margin on such date.
"COMMITMENT TERMINATION DATE" means, with respect to the Revolving
Loans and Letters of Credit, the Revolving Loan Commitment Termination Date, and
with respect to the Term Loans, the Continuation Date.
"COMMITMENT TERMINATION EVENT" means (a) the occurrence of any Default
described in CLAUSES (a) through (d) of SECTION 8.1.9; or (b) the occurrence and
continuance of any other Event of Default and either (i) the declaration of the
Loans and other Obligations to be due and payable pursuant to SECTION 8.3, or
(ii) in the absence of such declaration, the giving of notice by the Canadian
Administrative Agent, acting at the direction of the Required Lenders, to the
Borrower that the Commitments have been terminated.
"COMPANIES' CREDITORS ARRANGEMENT ACT (CANADA)" means the COMPANIES'
CREDITORS ARRANGEMENT ACT, R.S.C. 1985, c. C-36, including the regulations made
and from time to time in force under that Act.
"CONSOLIDATED NET INCOME" of the Parent means, for any period, the
aggregate net income (or net loss, as the case may be) of the Parent and its
Subsidiaries for such period on a consolidated basis, determined in accordance
with GAAP; PROVIDED, THAT there shall be excluded therefrom, without
duplication, (a) items classified as extraordinary (other than the tax benefit
of the utilization of net operating loss carry-forwards and alternative minimum
tax credits); (b) any gain or loss, net of taxes, on the sale or other
disposition of assets (including the capital stock or other equity ownership of
any other person, but excluding the sale of oil and gas inventories in the
ordinary course of business); (c) any gain or loss, net of taxes, realized on
the termination of any employee pension benefit plan; (d) any adjustments of a
deferred tax liability or asset pursuant to Statement of Financial Accounting
Standards No. 109 which result from changes in enacted tax laws or rates; (e)
the cumulative effect of a change in accounting principles; and (f) impairment
losses on oil and gas properties.
"CONTINGENT LIABILITY" means any agreement, undertaking or arrangement
by which any Person guarantees, endorses or otherwise becomes or is contingently
liable upon (by direct or indirect agreement, contingent or otherwise, to
provide funds for payment, to supply funds to, or otherwise to invest in, a
debtor, or otherwise to assure a creditor against loss) the indebtedness,
obligation or any other liability of any other Person (other than by
endorsements of instruments for deposit and/or in the course of collection), or
guarantees the payment of dividends or other distributions upon the shares of
any other Person; PROVIDED, HOWEVER, that notwithstanding the foregoing, the
definition of "Contingent Liability" shall not include (a) any contingent
payments owing by Parent or any of its Subsidiaries in connection with SECTION 2
of the West Shore/Basin Purchase Agreement, and (b) Incentive Payments paid in
accordance with the Incentive Payments
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Agreement. The amount of any Person's obligation under any Contingent Liability
shall (subject to any limitation set forth therein) be deemed to be the
outstanding principal amount (or maximum principal amount, if larger) of the
debt, obligation or other liability guaranteed thereby.
"CONTINUATION DATE" means October 11, 2002, or such later date to which
the Continuation Date is extended pursuant to SECTION 2.7.1.
"CONTINUATION/CONVERSION NOTICE" means a notice of continuation or
conversion and certificate duly executed by an Authorized Officer of the
Borrower, substantially in the form of EXHIBIT C hereto.
"CURRENT RATIO" means the Current Ratio as defined in the U.S. Credit
Agreement.
"DEFAULT" means any Event of Default or any condition, occurrence or
event which, after notice or lapse of time or both, would constitute an Event of
Default.
"DEFAULT RATE" means the rate of interest set forth in SECTION 3.2.2.
"DISCLOSURE SCHEDULE" means the Disclosure Schedule attached hereto as
SCHEDULE I, as it may be amended, supplemented or otherwise modified from time
to time by the Borrower with the written consent of the Canadian Administrative
Agent and the Required Lenders.
"DOLLAR" and "Cdn. Dollar" and the sign "Cdn. $" and "$" mean lawful
money of Canada.
"DOMESTIC OFFICE" means, relative to any Lender, the office of such
Lender designated as such on SCHEDULE IV hereto or designated in the Lender
Assignment Agreement or such other office of a Lender (or any successor or
assign of such Lender) within Canada as may be designated from time to time by
notice from such Lender, as the case may be, to each other Person party hereto.
"DOMESTIC SUBSIDIARY" means a Subsidiary of the Borrower that is
incorporated, organized or formed under the laws of Canada, or any province
thereof.
"EBITDA" means net earnings (excluding extraordinary items, gains and
losses on sales and retirement of assets, non-cash write downs and charges
resulting from accounting convention changes) before deduction for federal and
state income taxes, Interest Expense, depreciation, depletion and amortization
expense and other non-cash charges and expenses, including, without limitation,
non-cash charges and expenses relating to Hedging Agreements, of the Parent and
its Subsidiaries on a consolidated basis, all determined in accordance with
GAAP.
"EFFECTIVE DATE" means the first date all conditions precedent in
SECTION 5.1 are satisfied or waived in accordance with SECTION 10.1.
"ENVIRONMENTAL LAWS" means all applicable federal, provincial,
municipal, state or local statutes, laws, common law duties, ordinances, codes,
rules, regulations and guidelines (including
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consent decrees, administrative orders, directed duties, licenses and permits)
relating to environmental, health, safety and land use matters.
"EVENT OF DEFAULT" is defined in SECTION 8.1.
"EXISTING LENDERS" is defined in the SECOND RECITAL.
"EXISTING LOANS" is defined in the SECOND RECITAL.
"FEDERAL FUNDS RATE" means, for any day, a fluctuating interest rate
per annum (rounded upwards to the nearest 1/100 of 1%) equal to (a) the weighted
average of the rates on overnight federal funds transactions with members of the
U.S. Federal Reserve System arranged by federal funds brokers, as published for
such day (or, if such day is not a Business Day, for the next preceding Business
Day as so published on the next succeeding Business Day) by the Federal Reserve
Bank of New York; or (b) if such rate is not so published on the next succeeding
Business Day, the Federal Funds Rate for such day shall be the average rate
charged to the Canadian Administrative Agent on such day on such transactions as
determined by the Canadian Administrative Agent.
"FISCAL QUARTER" means any quarter of a Fiscal Year.
"FISCAL YEAR" means any period of twelve consecutive calendar months
ending on December 31; references to a Fiscal Year with a number corresponding
to any calendar year (E.G., the "2000 Fiscal Year") refer to the Fiscal Year
ending on December 31 during such calendar year.
"FIXED CHARGES" for any period ending on a calculation date means the
sum of (a) Interest Expense for such period, PLUS (b) maintenance capital
expenses of Parent and its Subsidiaries for such period, PLUS (c) dividends
paid, declared or required to be paid in such period in respect of preferred
stock, PLUS (d) 12.5% of the principal amount of Indebtedness (other than
Subordinated Debt) of the Parent and its Subsidiaries of the nature referred to
in CLAUSES (a), (b), and (c) of the definition of "Indebtedness" hereunder which
is outstanding on such date of calculation.
"FIXED CHARGE COVERAGE RATIO" as of a date means the ratio of (a)
EBITDA for the 12 months ended on such date, after adjusting such EBITDA on a
pro forma basis for any assets sold (to the extent set forth in the last
sentence of this definition) or acquired after the beginning of such 12-month
period as if such assets had been sold or acquired at the beginning of such
period (PROVIDED, HOWEVER, that the Required Lenders must consent to any pro
forma adjustments to actual historical EBITDA for any assets sold or acquired)
to (b) Fixed Charges for such 12-month period. There shall be an adjustment to
EBITDA on a pro forma basis for assets sold or transferred if the fair market
value of such assets (including the transfer of Hydrocarbon Interests as
payments in kind pursuant to the Incentive Payments Agreement as permitted by
SECTION 7.2.9(b)(vi)) at the time of conveyance equals or exceeds U.S.
$10,000,000 in any calendar year.
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"FOREIGN SUBSIDIARY" means a Subsidiary of the Borrower organized under
the laws of a jurisdiction outside Canada.
"F.R.S. BOARD" means the Board of Governors of the Federal Reserve
System or any successor thereto.
"GAAP" is defined in SECTION 1.4.
"GUARANTY" means any guaranty agreement executed and delivered pursuant
to SECTION 5.1.3 or SECTION 7.1.8, substantially in the form of EXHIBIT G-1 or
G-2 hereto, as amended, supplemented, restated or otherwise modified from time
to time.
"HAZARDOUS MATERIALS" means all those substances that are regulated by,
or which may form the basis of liability under, any Environmental Law, including
any substance identified under any Environmental Law as a pollutant,
contaminant, hazardous waste, hazardous constituent, special waste, hazardous
substance, hazardous material, or toxic substance, or petroleum or petroleum
derived substance or waste.
"HEDGING AGREEMENT" for a Person means any interest rate swap
agreements, interest rate cap agreements, interest rate collar agreements,
commodity price protection agreements, foreign exchange protection agreements,
and all other agreements or arrangements designed to protect such Person against
fluctuations in interest rates, commodity prices, or foreign exchange rates, as
any such agreement is amendment, supplemented or otherwise modified from time to
time.
"HEDGING COUNTERPARTY" means any Person which is a counterparty to a
Hedging Agreement.
"HEDGING OBLIGATION" means, with respect to any Person, all liabilities
of such Person under any Hedging Agreement.
"HEDGING POLICY" is defined in SECTION 7.1.9.
"HEREIN," "HEREOF," "HERETO," "HEREUNDER" and similar terms contained
in this Agreement or any other Loan Document refer to this Agreement or such
other Loan Document, as the case may be, as a whole and not to any particular
Section, paragraph or provision of this Agreement or such other Loan Document.
"HIGHEST LAWFUL RATE" means, with respect to each Lender to whom
Obligations are owed, the maximum nonusurious rate of interest that such Lender
is permitted under applicable law to contract for, take, charge, or receive with
respect to such Obligations. All determinations herein of the Highest Lawful
Rate, or of any interest rate determined by reference to the Highest Lawful
Rate, shall be made separately for each Lender as appropriate to assure that the
Loan Documents are not construed to obligate any Person to pay interest to any
Lender at a rate in excess of the Highest Lawful Rate applicable to such Lender.
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"HYDROCARBON INTERESTS" means leasehold and other interests in or under
oil, gas and other liquid or gaseous hydrocarbon leases with respect to Oil and
Gas Properties wherever located, mineral fee interests, overriding royalty and
royalty interests, net profit interests, production payment interests relating
to oil, gas or other liquid or gaseous hydrocarbons wherever located including
any reserved or residual interest of whatever nature.
"INCENTIVE PAYMENTS" means payments of the "Entitlement Amount" as
defined in and pursuant to the Incentive Payment Agreement.
"INCENTIVE PAYMENTS AGREEMENT" means collectively the Executive
Incentive and Employment Agreements dated August 10, 2001, between the Borrower
and the Parent and each of Ian R. De Bie, Brian E. Hiebert, Guy C. Grierson and
Gordon A. Maybee, in the forms delivered to the Canadian Administrative Agent
pursuant to SECTION 5.1.14 and as may be amended as permitted under ARTICLE VII.
"INCLUDE" and "INCLUDING" mean including without limiting the
generality of any description preceding each such term, and, for purposes of
this Agreement and each other Loan Document, the parties hereto agree that a
general statement, which is followed by or referable to an enumeration of
specific matters, shall not be limited to matters similar to the matters
specifically mentioned.
"INCOME TAX ACT (CANADA)" means the INCOME TAX ACT, S.C. 1970-71-72, c.
63, including the regulations made and, from time to time, in force under that
Act.
"INDEBTEDNESS" of any Person means, without duplication: (a) all
obligations of such Person for borrowed money and all obligations of such Person
evidenced by bonds, debentures, notes or other similar instruments; (b) all
obligations, contingent or otherwise, relative to the face amount of all letters
of credit, whether or not drawn, and banker's acceptances issued for the account
of such Person; (c) all obligations of such Person as lessee under leases which
have been or should be, in accordance with GAAP, recorded as Capitalized Lease
Liabilities; (d) all other items which, in accordance with GAAP, would be
included as liabilities on the liability side of the balance sheet of such
Person as of the date at which Indebtedness is to be determined other than
non-cash items, such as deferred taxes, required by GAAP to be included as
liabilities on the balance sheet; (e) net liabilities of such Person under all
Hedging Obligations except for non-cash mark-to-market adjustments required by
GAAP; (f) all obligations of such Person to pay the deferred purchase price of
property or services which have been or should be in accordance with GAAP,
included as liabilities, and indebtedness (excluding prepaid interest thereon)
secured by a Lien on property owned or being purchased by such Person (including
indebtedness arising under conditional sales or other title retention
agreements), whether or not such indebtedness shall have been assumed by such
Person except to the extent such indebtedness is expressly non-recourse to such
Person; and (g) all Contingent Liabilities of such Person in respect of any of
the foregoing; PROVIDED, HOWEVER, that for the purposes of this definition, a
production payment or similar transaction which is non-recourse to such Person
shall not constitute "Indebtedness." For all purposes of this Agreement, the
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Indebtedness of any Person shall include the Indebtedness of any partnership
or joint venture in which such Person is a general partner or a joint venturer
unless such Indebtedness is expressly non-recourse to such general partner or
joint venturer.
"INDEMNIFIED LIABILITIES" is defined in SECTION 10.4.
"INDEMNIFIED PARTIES" is defined in SECTION 10.4.
"INDEPENDENT ENGINEER" has the meaning set forth in SECTION 7.1.1(k).
"INITIAL RESERVE REPORT" means the reserve report(s) described in
SCHEDULE III.
"INSURANCE DEPOSIT ACCOUNT" is defined in SECTION 7.1.5.
"INTERCOMPANY LOAN" means the loan from Parent to the Borrower
evidenced by a promissory note dated as of August 10, 2001, the proceeds of
which were used by the Borrower to pay part of the cash portion of the purchase
price under the Acquisition Contracts and transaction expenses incurred in
connection therewith.
"INTERCREDITOR AGREEMENT" means that certain Intercreditor Agreement
dated as of even date herewith, by and among the Canadian Administrative Agent,
the Lenders hereunder, the administrative agent under the U.S. Credit Agreement
and the lenders thereunder, as amended, supplemented, restated or otherwise
modified from time to time.
"INTEREST ACT (CANADA)" means the INTEREST ACT, R.S.C. 1985, c. I-15,
including the regulations made and, from time to time, in force under that Act.
"INTEREST EXPENSE" means, for any period, for the Parent and its
Subsidiaries on a consolidated basis, the sum of (a) all interest, premium
payments, fees, charges and related expenses of the Parent and its Subsidiaries
in connection with borrowed money (including capitalized interest and including
fees payable in respect of letters of credit and bankers' acceptances) or in
connection with the deferred purchase price of assets, in each case to the
extent treated as interest in accordance with GAAP, and (b) the portion of rent
expense of the Parent and its Subsidiaries with respect to such period under
capital leases that is treated as interest in accordance with GAAP; PROVIDED,
HOWEVER, that the issuance of PIK Notes shall not be included in the calculation
of Interest Expense.
"INTEREST PERIOD" means, relative to any LIBO Rate Loans, the period
beginning on (and including) the date on which such LIBO Rate Loan is made or
continued as, or converted into, a LIBO Rate Loan pursuant to SECTION 2.3 or 2.4
and shall end on (but exclude) the day which numerically corresponds to such
date one, two, three or six months thereafter (or, if such month has no
numerically corresponding day, on the last Business Day of such month), in
either case as the Borrower may select in its relevant notice pursuant to
SECTION 2.3 or 2.4; PROVIDED, HOWEVER, that (a) the Borrower shall not be
permitted to select Interest Periods to be in effect at any one time which
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have expiration dates occurring on more than four different dates; (b) Interest
Periods commencing on the same date for Loans comprising part of the same
Borrowing shall be of the same duration; (c) if such Interest Period would
otherwise end on a day which is not a Business Day, such Interest Period shall
end on the next following Business Day (unless, if such Interest Period applies
to LIBO Rate Loans, such next following Business Day is the first Business Day
of a calendar month, in which case such Interest Period shall end on the
Business Day next preceding such numerically corresponding day); and (d) no
Interest Period may end later than the Stated Maturity Date.
"INVESTMENT" means, relative to any Person, (a) any loan or advance
made by such Person to any other Person (excluding travel and similar advances
not to exceed the Canadian Dollar Equivalent of U.S. $200,000 in the aggregate
for all such advances to officers and employees made in the ordinary course of
business, and relocation advances made to officers and employees in the ordinary
course of business); (b) any Contingent Liability of such Person; and (c) any
ownership or similar interest held by such Person in any other Person. The
amount of any Investment shall be the original principal or capital amount
thereof less all returns of principal or equity thereon (and without adjustment
by reason of the financial condition of such other Person) and shall, if made by
the transfer or exchange of property other than cash, be deemed to have been
made in an original principal or capital amount equal to the fair market value
of such property.
"ISSUANCE REQUEST" means a request and certificate duly executed by the
chief executive, accounting or financial Authorized Officer of the Borrower,
substantially in the form of EXHIBIT J attached hereto (with such changes
thereto as may be agreed upon from time to time by the Canadian Administrative
Agent, the Issuer and the Borrower).
"ISSUER" means the Canadian Administrative Agent or any other Lender
which has agreed to issue one or more Letters of Credit at the request of the
Canadian Administrative Agent (which shall, at the Borrower's request, notify
the Borrower from time to time of the identity of such other Lender).
"JUDGMENT INTEREST ACT (ALBERTA)" means the JUDGMENT INTEREST ACT, S.A.
1984 c. J-O.5, including the regulations made and, from time to time, in force
under that Act.
"LENDER ASSIGNMENT AGREEMENT" means a Lender Assignment Agreement,
substantially in the form of EXHIBIT D hereto.
"LENDER HEDGING AGREEMENT" means any Hedging Agreements entered into by
Borrower or any of its Subsidiaries in which a Lender or an Affiliate of a
Lender is the Hedging Counterparty.
"LENDERS" is defined in the preamble.
"LETTER OF CREDIT" is defined in SECTION 2.6.
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"LETTER OF CREDIT COMMITMENT" means, relative to any Lender, such
Lender's obligation to issue (in the case of an Issuer) or participate in (in
the case of all Lenders) Letters of Credit pursuant to SECTION 2.1.2.
"LETTER OF CREDIT OUTSTANDINGS" means, at any time, an amount equal to
the sum of (a) the aggregate Stated Amount at such time of all Letters of Credit
then outstanding and undrawn (as such aggregate Stated Amount shall be adjusted,
from time to time, as a result of drawings, the issuance of Letters of Credit,
or otherwise), PLUS (b) the then aggregate amount of all unpaid and outstanding
Reimbursement Obligations.
"LETTER OF CREDIT SUBLIMIT" means the Canadian Dollar Equivalent of
U.S. $5,000,000.
"LEVERAGE RATIO" means, as of a date, the ratio of (a) Total Funded
Debt to (b) EBITDA for the 12 months most recently ended prior to such date,
after adjusting such EBITDA on a pro forma basis for any assets sold (to the
extent set forth in the last sentence of this definition) or acquired after the
beginning of such most recently ended 12 months as if such assets had been sold
or acquired at the beginning of such twelve most recently ended months;
PROVIDED, HOWEVER, that the Required Lenders must consent to any pro forma
adjustments made to actual historical EBITDA for any asset which Parent or any
of its Subsidiaries has sold or acquired. There shall be an adjustment to EBITDA
on a pro forma basis for assets sold or transferred if the fair market value of
such assets at the time of conveyance (including the transfer of Hydrocarbon
Interests as payments in kind pursuant to the Incentive Payments Agreement as
permitted by SECTION 7.2.9(b)(vi)) equals or exceeds U.S. $10,000,000 in any
calendar year.
"LIBO RATE" means, relative to any Interest Period for LIBO Rate Loans,
(a) the interest rate per annum (carried out to the fifth decimal place) equal
to the rate determined by the Canadian Administrative Agent to be the offered
rate that appears on the page of the Telerate Screen that displays an average
British Bankers Association Interest Settlement Rate (such page currently being
page number 3740) for deposits in Cdn. Dollars (for delivery on the first day of
such Interest Period) with a term equivalent to such Interest Period, determined
as of approximately 11:00 a.m. (London time) two Business Days prior to the
first day of such Interest Period, or (b) in the event the rate referenced in
the preceding SUBSECTION (a) does not appear on such page or service or such
page or service shall cease to be available, the rate per annum (carried out to
the fifth decimal place) equal to the rate determined by the Canadian
Administrative Agent to be the offered rate on such other page or other service
that displays an average British Bankers Association Interest Settlement Rate
for deposits in Cdn. Dollars (for delivery on the first day of such Interest
Period) with a term equivalent to such Interest Period, determined as of
approximately 11:00 a.m. (London time) two Business Days prior to the first day
of such Interest Period, or (c) in the event the rates referenced in the
preceding SUBSECTIONS (a) and (b) are not available, the rate per annum
determined by the Canadian Administrative Agent as the rate of interest at which
deposits in Cdn. Dollars (for delivery on the first day of such Interest Period)
in same day funds in the approximate amount of the applicable LIBO Rate Loan and
with a term equivalent to such Interest Period would be offered by its London
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branch to major banks in the offshore Cdn. Dollar market at their request at
approximately 11:00 a.m. (London time) two Business Days prior to the first day
of such Interest Period.
"LIBO RATE LOAN" means a Loan bearing interest, at all times during an
Interest Period applicable to such Loan, at a fixed rate of interest determined
by reference to the LIBO Rate (Reserve Adjusted).
"LIBO RATE (RESERVE ADJUSTED)" means, relative to any Loan to be made,
continued or maintained as, or converted into, a LIBO Rate Loan for any Interest
Period, a rate per annum (rounded upwards, if necessary, to the nearest 1/16 of
1%) determined pursuant to the following formula:
LIBO Rate = LIBO RATE
(Reserve Adjusted) -----------------------
1.00 - LIBOR Reserve Percentage
The LIBO Rate (Reserve Adjusted) for any Interest Period for LIBO Rate
Loans will be determined by the Canadian Administrative Agent on the basis of
the LIBOR Reserve Percentage in effect on, and the applicable LIBO Rates
furnished to and received by the Canadian Administrative Agent from BofA Canada,
two Business Days before the first day of such Interest Period.
"LIBOR OFFICE" means, relative to any Lender, the office of such Lender
designated as such on SCHEDULE IV hereto or designated in the Lender Assignment
Agreement or such other office of a Lender as designated from time to time by
notice from such Lender to the Borrower and the Canadian Administrative Agent,
whether or not outside Canada, which shall be making or maintaining LIBO Rate
Loans of such Lender hereunder.
"LIBOR RESERVE PERCENTAGE" means, relative to any Interest Period for
LIBO Rate Loans, the reserve percentage (expressed as a decimal) equal to the
maximum aggregate reserve requirements (including all basic, emergency,
supplemental, marginal and other reserves and taking into account any
transitional adjustments or other scheduled changes in reserve requirements)
specified under regulations issued from time to time by the F.R.S. Board and
then applicable to assets or liabilities consisting of and including
"Eurocurrency Liabilities," as currently defined in Regulation D of the F.R.S.
Board, having a term approximately equal or comparable to such Interest Period.
Without limiting the effect of the foregoing, the Reserve Requirement shall
reflect any other reserves required to be maintained under such regulations with
respect to any category of liabilities which includes deposits by reference to
which the LIBO Rate (Reserve Adjusted) is to be determined.
"LIEN" means any security interest, mortgage, pledge, hypothecation,
assignment, deposit arrangement, encumbrance, lien (statutory or otherwise),
charge against or interest in property to secure payment of a debt or
performance of an obligation or other priority or preferential arrangement of
any kind or nature whatsoever.
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"LOAN" means an extension of credit by a Lender to the Borrower
pursuant to ARTICLE II.
"LOAN DOCUMENTS" means this Agreement, the Notes, each of the
Collateral Documents, each Guaranty, any Subordination Agreement, the
Intercreditor Agreement, and each other agreement, document or instrument
delivered by the Borrower, the Parent or any of their Subsidiaries from time to
time in connection with this Agreement and the Notes. In addition, references to
"Loan Documents" in the Collateral Documents shall include Lender Hedging
Agreements.
"MARGIN STOCK" means margin stock as defined in Regulation U.
"MARKWEST MICHIGAN" means MarkWest Michigan, Inc., a Colorado
corporation.
"MARKWEST RESOURCES" means MarkWest Resources, Inc., a Colorado
corporation.
"MATERIAL ADVERSE EFFECT" means with respect to any matter that such
matter could reasonably be expected to materially and adversely affect the
assets, business, properties, financial condition or prospects, or results or
operations of the Parent and its Subsidiaries taken as a whole, or the ability
of the Borrower or any other Obligor to perform in a material respect its
respective obligations under any of the Loan Documents.
"MATREX" means Matrex, L.L.C., a Michigan limited liability company.
"MIDSTREAM SERVICES" means MarkWest Canadian Midstream Services Inc.,
an Alberta corporation.
"MONTHLY PAYMENT DATE" means the last day of each calendar month or, if
any such day is not a Business Day, the next succeeding Business Day.
"MORTGAGES" means the Fixed Charge Mortgage dated as of even date with
this Agreement executed by the Borrower in connection herewith, and any and all
other mortgages that may be executed in the future securing all or any part of
the Obligations, executed by the Borrower, any of its Subsidiaries or any other
Person.
"NON-RESIDENT LENDER" means any Lender which is not a Canadian Resident
Lender, and shall initially mean each Lender identified as such on the signature
pages to this Agreement or thereafter on any Lender Assignment Agreement.
"NOON RATE" means, in relation to the conversion of one currency into
another currency, the rate of exchange for such conversion as quoted by the Bank
of Canada (or, if not so quoted, the spot rate of exchange quoted for wholesale
transactions made by Canadian Administrative Agent at Toronto, Ontario at
approximately noon (Toronto, Ontario local time)).
"NOTE" means a promissory note of the Borrower payable to any Lender,
in substantially the form of EXHIBIT A hereto (as such promissory note may be
amended, endorsed or otherwise modified
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from time to time), evidencing the aggregate Obligations of the Borrower to such
Lender resulting from outstanding Loans and Reimbursement Obligations, and also
means all other promissory notes accepted from time to time in substitution
therefor or renewal thereof.
"OBLIGATIONS" means all obligations (monetary or otherwise) of the
Borrower and each other Obligor arising under or in connection with this
Agreement, the Notes, the Reimbursement Obligations and each other Loan
Document. In addition, all references to "Obligations" in the Collateral
Documents and in SECTIONS 4.8, 4.9 and 10.17 shall, in addition to the
foregoing, also include all present and future indebtedness, liabilities and
obligations (and all renewals and extensions thereof or any part thereof) now or
hereafter owed by the Borrower and each other Obligor to any Lender or any
Affiliate of a Lender pursuant to a Lender Hedging Agreement.
"OBLIGOR" means the Borrower, Parent or any other Person (other than
the Canadian Administrative Agent or any Lender) obligated under any Loan
Document.
"OFFER OF EXTENSION" means a written offer by Canadian Administrative
Agent, for and on behalf of Required Lenders, to Borrower to extend the
Revolving Loan Availability Period to a date 364 days from acceptance by
Borrower of such offer, and setting forth, if applicable, the terms and
conditions on which such extension is offered by the Lenders and as may be
accepted by Borrower.
"OIL AND GAS" means petroleum, natural gas and other related
hydrocarbons or minerals or any of them and all other substances produced or
extracted in association therewith.
"OIL AND GAS PROPERTIES" means Hydrocarbon Interests now owned or
hereafter acquired by the Borrower and its Subsidiaries and contracts executed
in connection therewith and all tenements, hereditaments, appurtenances, and
properties belonging, affixed or incidental to such Hydrocarbon Interests,
including, without limitation, any and all property, real or personal, now owned
by the Borrower and its Subsidiaries and situated upon or to be situated upon,
and used, built for use, or useful in connection with the operating, working or
developing of such Hydrocarbon Interests, including, without limitation, any and
all petroleum and/or natural gas wells, buildings, structures, field separators,
liquid extractors, plant compressors, pumps, pumping units, field gathering
systems, tank and tank batteries, fixtures, valves, fittings, machinery and
parts, engines, boilers, liters, apparatus, equipment, appliances, tools,
implements, cables, wires, towers, taping, tubing and rods, surface leases,
rights-of-way, easements and servitudes, and all additions, substitutions,
replacements for, fixtures and attachments to any and all of the foregoing owned
directly or indirectly by the Borrower and its Subsidiaries.
"ORGANIC DOCUMENT" means, relative to any Obligor, its certificate of
incorporation, articles of formation, operating agreement, its by-laws and all
shareholder agreements, voting trusts and similar arrangements applicable to any
of its authorized shares of capital stock or equity interests.
"PARENT" is defined in the SECOND RECITAL.
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"PARENT GUARANTY" means the Guaranty in substantially the form attached
as EXHIBIT G-1 hereto, executed by the Parent in connection herewith.
"PARTICIPANT" is defined in SECTION 10.11.
"PERCENTAGE" means, relative to any Lender, the percentage set forth on
SCHEDULE V hereto or set forth in a Lender Assignment Agreement, as such
percentage may be adjusted from time to time pursuant to Lender Assignment
Agreement(s) executed by such Lender and its Assignee Lender(s) and delivered
pursuant to SECTION 10.11; PROVIDED, THAT the sum of all Percentages for all
Lenders shall never be less than 100%.
"PERMITTED LIENS" has the meaning set forth in SECTION 7.2.3.
"PERSON" means any natural person, corporation, partnership, firm,
association, trust, government, governmental agency or any other entity, whether
acting in an individual, fiduciary or other capacity.
"PIK NOTES" means Subordinated Notes that may be issued pursuant to
Subordinated Debt Documents in connection with the Parent's exercise of its
option to elect to pay accrued and unpaid interest on Subordinated Debt by
delivery of additional Subordinated Notes.
"QUARTERLY PAYMENT DATE" means the last day of each March, June,
September and December or, if any such day is not a Business Day, the next
succeeding Business Day.
"QUARTERLY STATUS REPORT" means a status report prepared quarterly by
the Parent in form, scope and content acceptable to the Canadian Administrative
Agent (a) detailing production from the Oil and Gas Properties, the volumes of
Oil and Gas produced and saved, the volumes of Oil and Gas sold, gross revenue,
net income, related leasehold operating expenses, severance taxes, other taxes,
capital costs and any production imbalances incurred during such period, (b)
describing the Parent's and the Borrower's respective position regarding its
Hedging Agreements with respect to its Oil and Gas Properties including the
amount contracted in volumes and as a percentage of such company's total
anticipated production, length of contracts, and the price or prices hedged, and
(c) setting forth such additional information with respect to any of Parent's
and/or Borrower's Oil and Gas Properties as may be reasonably requested by
Canadian Administrative Agent, in each case for such quarter then ended.
"REDEEMABLE PREFERRED STOCK" means preferred stock that has, or is
convertible into any security that has, mandatory redemption or repurchase
requirements (other than those exercisable solely at the option of the issuer of
said stock) on or prior to the date set forth in the definition of Stated
Maturity Date.
"REGULATION U" means Regulation U of the Board of Governors of the
Federal Reserve System.
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"REIMBURSEMENT OBLIGATION" is defined in SECTION 2.6.5.
"REQUEST FOR AN OFFER OF EXTENSION" means a written request made by
Borrower to the Lenders to have Required Lenders issue an offer to Borrower
extending the Revolving Loan Availability Period for a further 364 days.
"REQUIRED LENDERS" means, at any time, the Canadian Administrative
Agent and two or more Lenders holding at least 66% of the then aggregate
outstanding principal amount of the Notes then held by the Lenders, or, if no
such principal amount is then outstanding, the Canadian Administrative Agent and
Lenders having at least 66% of the aggregate Commitments.
"RESERVE REPORT" means a report, prepared in accordance with guidelines
and requirements of the United States Securities and Exchange Commission in form
acceptable to the Canadian Administrative Agent, covering proved developed and
proved undeveloped Oil and Gas reserves attributable to Borrower's and its
Subsidiaries' Oil and Gas Properties and setting forth with respect thereto, (a)
the total quantity of proved developed and proved undeveloped reserves
(separately classified as to producing, shut-in, behind pipe, and undeveloped),
(b) the estimated future net revenues and cumulative estimated future net
revenues, (c) the present discounted value of future net revenues, and (d) such
other information and data with respect to the Oil and Gas Properties as the
Canadian Administrative Agent may reasonably request.
"REVOLVING LOAN" means a loan made pursuant to SECTION 2.1.1.
"REVOLVING LOAN AVAILABILITY PERIOD" has the meaning set forth in
SECTION 2.1.1(b).
"REVOLVING LOAN COMMITMENT" means, relative to any Lender, such
Lender's obligation to make Revolving Loans pursuant to SECTION 2.1.1.
"REVOLVING LOAN COMMITMENT AMOUNT" means on any date, the Canadian
Dollar Equivalent of U.S. $35,000,000, as such amount may be increased from time
to time pursuant to SECTION 2.1.6 and as may be reduced from time to time
pursuant to SECTION 2.2.
"REVOLVING LOAN COMMITMENT TERMINATION DATE" means the earliest of (a)
the Continuation Date, (b) the date on which the Revolving Loan Commitment
Amount is terminated in full or reduced to zero pursuant to SECTION 2.2, and (c)
the date on which any Commitment Termination Event occurs. Upon the occurrence
of any event described in CLAUSE (b) or (c), the Revolving Loan Commitments
shall terminate automatically and without any further action.
"RIGHTS" means rights, remedies, powers, privileges and benefits.
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"SCHEDULE I BA REFERENCE BANKS" means the Lenders listed in SCHEDULE I
to the BANK ACT (Canada) as are, at such time, designated by the Canadian
Administrative Agent, with the prior consent of the Borrower (acting
reasonably), as the Schedule I BA Reference Banks.
"SCHEDULE II BA REFERENCE BANKS" means the Lenders listed in SCHEDULE
II to the BANK ACT (Canada) as are, at such time, designated by the Canadian
Administrative Agent, with the prior consent of the Borrower (acting
reasonably), as the Schedule II BA Reference Banks.
"SCHEDULE III ASSIGNMENT" means the assignment, effective January 1,
2002, by BofA Canada of its Loans and Commitments hereunder to Bank of America,
N.A., or any branch or Affiliate thereof, pursuant to the acquisition by Bank of
America, N.A. of a Schedule III license in accordance with the Bank Act.
"SCHEDULE III BANK" means a bank listed on SCHEDULE III to the Bank Act
(Canada) that is not subject to the restrictions and requirements referred to in
subsection 524(2) of the Bank Act (Canada).
"STATED AMOUNT" of each Letter of Credit means the face amount of such
Letter of Credit as such amount is in effect on the issuance date thereof.
"STATED EXPIRY DATE" is defined in SECTION 2.6.1.
"STATED MATURITY DATE" means (a) in the case of any unpaid and
outstanding Reimbursement Obligations, the Continuation Date, and (b) in the
case of any Loan, (i) if on the Continuation Date an Event of Default shall have
occurred and be continuing, the Continuation Date, or (ii) in all other cases,
the Term Loan Maturity Date.
"SUBORDINATED DEBT" means Indebtedness of the Parent that the Parent
designates as "Subordinated Indebtedness" hereunder by giving written notice to
the Canadian Administrative Agent, which Indebtedness is issued upon, and that
is governed by documents containing, terms and conditions satisfactory to the
Required Lenders in their sole discretion and that is subordinated to the
Obligations upon terms and conditions satisfactory to the Required Lenders in
their sole discretion.
"SUBORDINATED DEBT DOCUMENTS" means documents executed in connection
with Subordinated Debt.
"SUBORDINATED NOTES" means promissory notes evidencing Subordinated
Debt.
"SUBORDINATION AGREEMENT" means a subordination agreement or other
agreement containing the terms upon which Subordinated Debt is subordinated to
the "Obligations" under the U.S. Credit Agreement.
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"SUBSIDIARY" of a Person means a corporation, partnership, joint
venture, limited liability company or other business entity of which a majority
of the shares of securities or other interests having ordinary voting power for
the election of directors or other governing body (other than securities or
interests having such power only by reason of the happening of a contingency)
are at the time beneficially owned, or the management of which is otherwise
controlled, directly, or indirectly through one or more intermediaries, or both,
by such Person. Unless otherwise specified, all references herein to a
"Subsidiary" or to "Subsidiaries" shall refer to a Subsidiary or Subsidiaries of
the Borrower.
"TANGIBLE NET WORTH" means the consolidated net worth of the Parent and
its Subsidiaries (excluding any Redeemable Preferred Stock) after subtracting
therefrom the aggregate amount of any Intangible Assets of the Parent and its
Subsidiaries. "INTANGIBLE ASSETS" means the amount (to the extent reflected in
determining consolidated net worth) of all unamortized debt discount and expense
(to the extent, if any, recorded as an unamortized deferred charge), unamortized
deferred charges, goodwill, franchises, licenses, patents, trademarks, trade
names, copyrights, service marks and brand names; PROVIDED, THAT for purposes of
this definition, consolidated net worth shall be adjusted to exclude non-cash
items, including foreign currency translation adjustments, unrealized gains and
losses, and mark-to-market adjustments relating to Hedging Agreements, pursuant
to GAAP.
"TAXES" is defined in SECTION 4.6.
"TERM LOAN" means the term loan of each Lender made pursuant to SECTION
2.1.4.
"TERM LOAN COMMITMENT" means, relative to any Lender, such Lender's
obligation to make a Term Loan pursuant to SECTION 2.1.4.
"TERM LOAN COMMITMENT AMOUNT" means an amount equal to the lesser of
(a) the Revolving Loan Commitment Amount and (b) the aggregate amount of
Revolving Loans outstanding and unpaid and the outstanding Reimbursement
Obligations on the Continuation Date, as such amount may be reduced from time to
time pursuant to SECTION 2.2.
"TERM LOAN MATURITY DATE" means the earliest of (a) the date that is
five years and one day following the Continuation Date, (b) the date on which
the Term Loan Commitment Amount is terminated in full or reduced to zero
pursuant to SECTION 2.2, and (c) the date on which any Commitment Termination
Event occurs.
"TERM LOAN PRINCIPAL DEBT" means, on any date of determination after
the Continuation Date, the aggregate unpaid principal balance of all Borrowings
as of such date.
"TOTAL FUNDED DEBT" means, as of any date, the sum without duplication
of (a) the outstanding principal amount of all Indebtedness of the Parent and
its Subsidiaries of the nature referred to in CLAUSES (a), (b), (c) and (f) of
the definition of Indebtedness and (b) all Redeemable Preferred Stock of the
Parent and its Subsidiaries, valued at the redemption price thereof; PROVIDED,
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HOWEVER, in the event that Parent's "working capital" (determined in
accordance with GAAP) is greater than $0 at any time at which the Parent's
Total Funded Debt is calculated, then Total Funded Debt for such time period
shall equal the outstanding principal amount of all Indebtedness of the
Parent and its Subsidiaries of the nature referred to in CLAUSES (a), (b),
(c) and (f) of the definition of Indebtedness PLUS all Redeemable Preferred
Stock of the Parent and its Subsidiaries, LESS cash on hand or Cash
Equivalent Investments which are free and clear of all Liens, other than
Liens securing the Loans and "Liens" securing the "Loans" under the U.S.
Credit Agreement.
"TYPE" means, relative to any Loan, the portion thereof, if any, being
maintained as a Canadian Prime Rate Loan or a LIBO Rate Loan.
"U.S. COMMITMENT PORTION" at any time means an amount equal to the
Revolving Loan Commitment Amount as defined in the U.S. Credit Agreement in
effect at such time PLUS the aggregate principal amount of the Term Loan
Principal Debt as defined in the U.S. Credit Agreement then outstanding.
"U.S. CREDIT AGREEMENT" means that certain Fourth Amended and Restated
Credit Agreement dated of even date herewith, among Parent, the lenders from
time to time party thereto, and Bank of America, N.A., as administrative agent,
as amended and as in effect from time to time.
"U.S. DOLLAR" or "U.S. $" means the lawful currency of the United
States of America.
"U.S. DOLLAR EQUIVALENT" means, on any day, the amount of U.S. Dollars
required to purchase the relevant stated amount of Canadian Dollars based on an
exchange rate equal to the Noon Rate in effect on such day.
"UNITED STATES" or "U.S." means the United States of America, its fifty
states and the District of Columbia.
"WEST SHORE" means West Shore Processing Company, L.L.C., a Michigan
limited liability company.
"WEST SHORE/BASIN PURCHASE AGREEMENT" means that certain Purchase and
Sale Agreement dated as of November 21, 1997, between Michigan Energy Company
and MarkWest Michigan.
"WHOLLY-OWNED SUBSIDIARY" means a Subsidiary of the Borrower of which
all of the equity is owned by the Borrower.
SECTION 1.2 USE OF DEFINED TERMS. Unless otherwise defined or the
context otherwise requires, terms for which meanings are provided in this
Agreement shall have such meanings when used in the Disclosure Schedule and in
each Note, Borrowing Request, Continuation/Conversion Notice, Loan Document,
notice and other communication delivered from time to time in connection with
this Agreement or any other Loan Document.
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SECTION 1.3 CROSS-REFERENCES. Unless otherwise specified, references in
this Agreement and in each other Loan Document to any Article or Section are
references to such Article or Section of this Agreement or such other Loan
Document, as the case may be, and, unless otherwise specified, references in any
Article, Section or definition to any clause are references to such clause of
such Article, Section or definition.
SECTION 1.4 ACCOUNTING AND FINANCIAL DETERMINATIONS. Unless otherwise
specified, all accounting terms used herein or in any other Loan Document shall
be interpreted, all accounting determinations and computations hereunder or
thereunder (including under SECTION 7.2.4) shall be made, and all financial
statements required to be delivered hereunder or thereunder shall be prepared in
accordance with, those U.S. generally accepted accounting principles ("GAAP")
applied in the preparation of the financial statements referred to in SECTION
6.5.
ARTICLE II
COMMITMENTS, BORROWING PROCEDURES AND NOTES
SECTION 2.1 COMMITMENTS. On the terms and subject to the conditions of
this Agreement (including ARTICLE V), each Lender severally, to the extent of
its Percentage, agrees to make Loans pursuant to the Commitments described in
this SECTION 2.1.
SECTION 2.1.1 REVOLVING LOAN COMMITMENT.
(a) Each Lender severally, but not jointly, agrees to
lend to the Borrower such Lender's Percentage of one or more Borrowings during
the Revolving Loan Availability Period (defined below), not to exceed such
Lender's Percentage of the Revolving Loan Commitment Amount.
(b) Subject to the conditions set forth in this
Agreement, Revolving Loans shall be available during the period beginning on the
Effective Date and ending on the day prior to the Continuation Date (the
"REVOLVING LOAN AVAILABILITY PERIOD").
(c) On the terms and subject to the conditions hereof,
the Borrower may from time to time borrow and prepay Revolving Loans.
SECTION 2.1.2 COMMITMENT TO ISSUE LETTERS OF CREDIT. From time to time
on any Business Day prior to the Revolving Loan Commitment Termination Date,
each Issuer will issue, and each Lender will participate in, to the extent of
each Lender's Percentage, the Letters of Credit, in accordance with the terms of
SECTION 2.6.
SECTION 2.1.3 [INTENTIONALLY LEFT BLANK].
SECTION 2.1.4 TERM LOAN COMMITMENT. Subject to the terms and conditions
of SECTION 2.7.2, on the Continuation Date each Lender's Revolving Loan will be
continued as a Term
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Loan to the Borrower in the amount equal to such Lender's Percentage of the
Revolving Loans then outstanding, or such lesser amount as requested by the
Borrower. Such continuation shall not be considered to be a repayment of the
Revolving Loans. If all or a portion of the Term Loan Principal Debt is paid or
prepaid, then the amount so paid or prepaid may not be reborrowed.
SECTION 2.1.5 LENDERS NOT REQUIRED TO MAKE LOANS OR ISSUE OR
PARTICIPATE IN LETTERS OF CREDIT. No Lender shall be permitted or required to
(a) make any Revolving Loan if, after giving effect thereto, (i) the aggregate
outstanding principal amount of all Revolving Loans of all Lenders, together
with all Letter of Credit Outstandings, would exceed the Revolving Loan
Commitment Amount; or (ii) the aggregate outstanding principal amount of all
Revolving Loans of such Lender, together with its Percentage of all Letter of
Credit Outstandings, would exceed such Lender's Percentage of the Revolving Loan
Commitment Amount, or (b) issue (in the case of any Issuer) or participate in
(in the case of each Lender) any Letter of Credit if, after giving effect
thereto, (i) all Letter of Credit Outstandings together with the aggregate
outstanding principal amount of all Loans of all Lenders would exceed the
Revolving Loan Commitment Amount, or (ii) such Lender's Percentage of all Letter
of Credit Outstandings together with the aggregate outstanding principal amount
of all Loans of such Lender would exceed such Lender's Percentage of the
Revolving Loan Commitment Amount, or (iii) all Letter of Credit Outstandings
would exceed the Letter of Credit Sublimit.
SECTION 2.1.6 INCREASE IN REVOLVING LOAN COMMITMENT AMOUNT.
(a) During the Revolving Loan Availability Period, the
Borrower may, by written notice (the "INCREASE NOTICE") to the Canadian
Administrative Agent (and the Canadian Administrative Agent shall promptly
deliver a copy of such notice to the Lenders), request that the aggregate amount
of the Revolving Loan Commitment Amount be increased by an amount not less than
the Canadian Dollar Equivalent of U.S. $5,000,000; PROVIDED, THAT (i) such
increase hereunder shall not exceed the Canadian Dollar Equivalent of U.S.
$20,000,000 MINUS any amount by which the Revolving Loan Commitment Amount shall
have been reduced pursuant to SECTION 2.2, and (ii) after giving effect to such
increase, the aggregate amount of the Revolving Loan Commitment Amount hereunder
PLUS the aggregate amount of the Revolving Loan Commitment Amount under the U.S.
Credit Agreement shall not exceed the Canadian Dollar Equivalent of U.S.
$110,000,000, MINUS any amount by which the Revolving Loan Commitment Amount
under the U.S. Credit Agreement shall have been reduced pursuant to the
provisions of the applicable credit agreement permitting the borrower thereunder
to reduce the commitments thereunder. The Increase Notice shall set forth the
amount of the requested increase in the Revolving Loan Commitment Amount and the
date on which such increase is requested to become effective (which shall be not
less than 30 days or more than 60 days after the date of such notice) and at the
Borrower's option, may offer to one or more existing Lenders and/or other banks
or financial institutions (any such Lender or other bank or other institution
referred to in this clause (a) being called an "AUGMENTING LENDER") the
opportunity to extend credit hereunder or increase their existing Revolving Loan
Commitment Amount in an aggregate amount equal to the proposed increase;
PROVIDED, THAT no Lender shall be obligated to agree to increase its Revolving
Loan Commitment Amount; and PROVIDED, FURTHER, that
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each Augmenting Lender, if not already a Lender hereunder, shall be subject to
the approval of the Canadian Administrative Agent (which approval shall not be
unreasonably withheld) and the Borrower and each such Augmenting Lender shall
execute all such documentation as the Canadian Administrative Agent shall
reasonably specify to evidence its Revolving Loan Commitment Amount and status
as a Lender hereunder.
(b) On the effective date (the "INCREASE EFFECTIVE DATE")
of any increase in the Revolving Loan Commitment Amount pursuant to this SECTION
2.1.6 (the "COMMITMENT INCREASE"), (i) each Augmenting Lender that shall have
been a Lender prior to the Commitment Increase shall pay to the Canadian
Administrative Agent in same day funds an amount equal to the difference between
(A) the product of (1) such Lender's Percentage of the Commitment (the "PRO RATA
SHARE") (calculated after giving effect to the Commitment Increase) MULTIPLIED
BY (2) the amount of the Post-Continued Loans (as hereinafter defined) and (B)
the product of (1) such Lender's Pro Rata Share (calculated without giving
effect to the Commitment Increase) MULTIPLIED BY (2) the aggregate principal
amount of the Loans outstanding (the "PRE-CONTINUED LOANS") immediately prior to
giving effect to the Commitment Increase on the Increase Effective Date, (ii)
each Augmenting Lender that shall not have been a Lender prior to the Commitment
Increase shall pay to the Canadian Administrative Agent in same day funds an
amount equal to the product of (1) such Augmenting Lender's Pro Rata Share
(calculated after giving effect to the Commitment Increase) MULTIPLIED BY (2)
the amount of the Post-Continued Loans, (iii) after the Canadian Administrative
Agent receives the funds specified in clauses (i) and (ii) above, the Canadian
Administrative Agent shall pay to each Lender whose Commitment is not being
increased (a "NON-INCREASING LENDER") the portion of such funds that is equal to
the difference between (A) the product of (1) such Non-Increasing Lender's Pro
Rata Share (calculated without giving effect to the Commitment Increase)
MULTIPLIED BY (2) the amount of the Pre-Continued Loans and (B) the product of
(1) such Non-Increasing Lender's Pro Rata Share (calculated after giving effect
to the Commitment Increase) MULTIPLIED BY (2) the amount of the Post-Continued
Loans, (iv) each Non-Increasing Lender and each Augmenting Lender shall be
deemed to hold its Pro Rata Share of each Post-Continued Loan (each calculated
after giving effect to the Commitment Increase) and (v) the Borrower shall pay
each Augmenting Lender that shall have been a Lender prior to the Commitment
Increase and each Non-Increasing Lender any and all accrued but unpaid interest
on the Pre-Continued Loans up to but not including the Increase Effective Date.
As used in this SUBSECTION (b), "Post-Continued Loans" means, after the
effectiveness of the Commitment Increase, Borrowings in an aggregate principal
amount equal to the Pre-Continued Loans and of the types and for the Interest
Periods specified in a Borrowing Request delivered to the Canadian
Administrative Agent in accordance with SECTION 2.3.
(c) Increases and new Revolving Loan Commitment Amount
created pursuant to this SECTION 2.1.6 shall become effective on the date
specified in the notice delivered by the Borrower pursuant to the first sentence
of PARAGRAPH (a) above.
(d) No increase in the total Revolving Loan Commitment
Amount (or in the Commitment of any Lender) or addition of a new Lender shall
become effective under this Section unless (i) the Borrower shall deliver a
certificate of an Authorized Officer, dated as of the Increase
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Effective Date, certifying that no Default shall have occurred and be continuing
and that the representations and warranties of the Borrower contained in this
Agreement are true and correct on and as of such date, and (ii) the Canadian
Administrative Agent shall have received documents and an opinion consistent
with those delivered on the Effective Date under SECTIONS 5.1.1 and 5.1.6 as to
the corporate authority of the Borrower to continue to borrow hereunder after
giving effect to such increase.
(e) Notwithstanding the foregoing, no increase in the
Revolving Loan Commitment Amount may be made pursuant to this SECTION 2.1.6
unless, after such increase, the Percentage of each Lender hereunder is the same
as the pro rata share of such Lender or its Affiliate under the U.S. Credit
Agreement.
SECTION 2.2 OPTIONAL REDUCTION OF COMMITMENT AMOUNT. The Borrower may,
from time to time on any Business Day, voluntarily reduce the Commitment Amount;
PROVIDED, HOWEVER, that all such reductions shall require at least three
Business Days' prior notice to the Canadian Administrative Agent and be
permanent, and any partial reduction of any Commitment Amount shall be in a
minimum amount of Cdn. $2,500,000, and greater integral multiples of Cdn.
$500,000.
SECTION 2.3 BORROWING PROCEDURE. By delivering a Borrowing Request to
the Canadian Administrative Agent on or before 12:00 p.m. (noon), Toronto,
Ontario time, on a Business Day, the Borrower may from time to time irrevocably
request, (a) on not less than three nor more than five Business Days' notice, a
LIBO Rate Loan, or (ii) on not less than two Business Days' or more than five
Business Days' notice, a Canadian Prime Rate Loan in a minimum amount of Cdn.
$1,000,000 and greater integral multiples of Cdn. $500,000, or in the unused
amount of the applicable Commitment, if less. On the terms and subject to the
conditions of this Agreement, each Borrowing shall be comprised of the type of
Loans, and shall be made on the Business Day specified in such Borrowing
Request. On or before 11:00 a.m., Toronto, Ontario time, on such specified
Business Day each Lender shall deposit with the Canadian Administrative Agent
same day funds in an amount equal to such Lender's Percentage of the requested
Borrowing. Such deposit will be made to an account which the Canadian
Administrative Agent shall specify from time to time by notice to the Lenders.
To the extent funds are received from the Lenders, the Canadian Administrative
Agent shall make such funds available to the Borrower by wire transfer to the
accounts the Borrower shall have specified in its Borrowing Request. No Lender's
obligation to make any Loan shall be affected by any other Lender's failure to
make any Loan.
(b) Canadian Prime Rate Loans and LIBO Rate Loans shall
be funded in Canadian Dollars.
SECTION 2.4 CONTINUATION AND CONVERSION ELECTIONS. By delivering a
Continuation/Conversion Notice to the Canadian Administrative Agent on or before
12:00 p.m. (noon), Toronto, Ontario time, on a Business Day, the Borrower may
from time to time irrevocably elect, (a) on not less than three nor more than
five Business Days' notice, in connection with any LIBO Rate Loan or any
Canadian Prime Rate Loan that all, or any portion in an aggregate minimum
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amount of Cdn. $1,000,000, and greater integral multiples of Cdn. $500,000, of
any Loans be, in the case of Canadian Prime Rate Loans, converted into LIBO Rate
Loans or, in the case of LIBO Rate Loans, be continued as a LIBO Rate Loan, and
(b) on or before one (1) Business Day prior to the last day of the then current
Interest Period with respect to a LIBO Rate Loan, that such Loan be converted
into a Canadian Prime Rate Loan (in the absence of delivery of a
Continuation/Conversion Notice with respect to any LIBO Rate Loan at least three
Business Days before the last day of the then current Interest Period with
respect thereto, such LIBO Rate Loan shall, on such last day, automatically
convert to a Canadian Prime Rate Loan); PROVIDED, HOWEVER, that (x) each such
conversion or continuation shall be pro rated among the applicable outstanding
Loans of all Lenders, and (y) no portion of the outstanding principal amount of
any Loans may be continued as, or be converted into, LIBO Rate Loans when any
Default has occurred and is continuing. A continuation or conversion shall not
be considered a new Loan or Borrowing hereunder.
SECTION 2.5 NOTES.
(a) The Loans made by, and the Borrower's Reimbursement
Obligations to, each Lender shall be evidenced by one or more accounts or
records maintained by such Lender and by the Canadian Administrative Agent in
the ordinary course of business. The accounts or records maintained by the
Canadian Administrative Agent and each Lender shall be prima facie evidence of
the Loans and the Borrower's Reimbursement Obligations, absent manifest error.
Any failure so to record or any error in doing so shall not, however, limit or
otherwise affect the obligation of the Borrower hereunder to pay any amount
owing with respect to the Loans and Letters of Credit. In addition to such
accounts or records, each Lender's Loans may be evidenced by a Note
substantially in the form of EXHIBIT A hereto. Each Lender may attach schedules
to its Note(s) and endorse thereon the date, amount and maturity of the
applicable Loans and payments with respect thereto.
(b) In addition to the accounts and records referred to
in SUBSECTION (a), each Lender and the Canadian Administrative Agent shall
maintain in accordance with its usual practice accounts or records evidencing
the purchases and sales by such Lender of participations in Letters of Credit.
In the event of any conflict between the accounts and records maintained by the
Canadian Administrative Agent and the accounts and records of any Lender in
respect of such matters, the accounts and records of the Canadian Administrative
Agent shall control.
SECTION 2.6 LETTERS OF CREDIT.
SECTION 2.6.1 ISSUANCE REQUESTS. By delivering to the Canadian
Administrative Agent and the applicable Issuer an Issuance Request on or before
11:30 a.m., Toronto, Ontario time, the Borrower may request, from time to time
prior to the Commitment Termination Date and on not less than three nor more
than ten Business Days' notice, that such Issuer issue an irrevocable standby
letter of credit in such form as may be mutually agreed to by the Borrower and
such Issuer (each a "LETTER OF CREDIT"), in support of financial and performance
obligations of the Borrower incurred in the Borrower's ordinary course of
business and which are described in such Issuance Request. Upon receipt of an
Issuance Request, the Canadian Administrative Agent shall promptly
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notify the Lenders thereof. Each Letter of Credit shall by its terms: (a) be
issued in a Stated Amount which (i) together with all Letter of Credit
Outstandings does not exceed the Letter of Credit Sublimit, or (ii) together
with all Letter of Credit Outstandings and all outstanding Loans does not exceed
(or would not exceed) the Revolving Loan Commitment Amount as of such date (as
such amount is reduced and is scheduled to reduce prior to the Stated Expiry
Date pursuant to SECTION 2.2); and (b) be stated to expire on a date (its
"STATED EXPIRY DATE") no later than the earlier of (i) one year from its date of
issuance and (ii) the Revolving Loan Commitment Termination Date. So long as no
Default has occurred and is continuing, by delivery to the applicable Issuer and
the Canadian Administrative Agent of an Issuance Request at least three but not
more than ten Business Days prior to the Stated Expiry Date of any Letter of
Credit, the Borrower may request such Issuer to extend the Stated Expiry Date of
such Letter of Credit for an additional period not to exceed the earlier of one
year from its date of extension and the Revolving Loan Commitment Termination
Date.
SECTION 2.6.2 ISSUANCES AND EXTENSIONS. On the terms and subject to the
conditions of this Agreement (including ARTICLE V), the Issuer shall issue
Letters of Credit, and extend the Stated Expiry Dates of outstanding Letters of
Credit, in accordance with the Issuance Requests made therefor. Each Issuer will
make available the original of each Letter of Credit which it issues in
accordance with the Issuance Request therefor to the beneficiary thereof (and
will promptly provide each of the Lenders and the Borrower with a copy of such
Letter of Credit) and will notify the beneficiary under any Letter of Credit of
any extension of the Stated Expiry Date thereof.
SECTION 2.6.3 OTHER LENDERS' PARTICIPATION. Each Letter of Credit
issued pursuant to SECTION 2.6.2 shall, effective upon its issuance and without
further action, be issued on behalf of all Lenders (including the Issuer
thereof) PRO RATA according to their respective Percentages. Each Lender shall,
to the extent of its Percentage, be deemed irrevocably to have participated in
the issuance of such Letter of Credit and shall be responsible to reimburse
promptly the Issuer thereof for Reimbursement Obligations which have not been
reimbursed by the Borrower in accordance with SECTION 2.6.5, or which have been
reimbursed by the Borrower but must be returned, restored or disgorged by such
Issuer for any reason, and each Lender shall, to the extent of its Percentage,
be entitled to receive from the Canadian Administrative Agent a ratable portion
of the letter of credit fees received by the Canadian Administrative Agent
pursuant to SECTION 3.3.3, with respect to each Letter of Credit. In the event
that the Borrower shall fail to reimburse any Issuer, or if for any reason Loans
shall not be made to fund any Reimbursement Obligation, all as provided in
SECTION 2.6.5 and in an amount equal to the amount of any drawing honored by
such Issuer under a Letter of Credit issued by it, or in the event such Issuer
must for any reason return or disgorge such reimbursement, such Issuer shall
promptly notify each Lender of the unreimbursed amount of such drawing and of
such Lender's respective participation therein. Each Lender shall make available
to such Issuer, whether or not any Default shall have occurred and be
continuing, an amount equal to its respective participation in same day or
immediately available funds at the office of such Issuer specified in such
notice not later than 11:30 a.m., Toronto, Ontario time, on the Business Day
(under the laws of the jurisdiction of such Issuer) after the date notified by
such Issuer. In the event that any Lender fails to make available to such Issuer
the amount of such Lender's participation in such Letter of Credit as
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provided herein, such Issuer shall be entitled to recover such amount on demand
from such Lender together with interest at the daily average Federal Funds Rate
for three Business Days (together with such other compensatory amounts as may be
required to be paid by such Lender to the Canadian Administrative Agent pursuant
to the Rules for Interbank Compensation of the council on International Banking
or the Clearinghouse Compensation Committee, as the case may be, as in effect
from time to time) and thereafter at the Canadian Prime Rate PLUS 2%. Nothing in
this Section shall be deemed to prejudice the right of any Lender to recover
from any Issuer any amounts made available by such Lender to such Issuer
pursuant to this Section in the event that it is determined by a court of
competent jurisdiction that the payment with respect to a Letter of Credit by
such Issuer in respect of which payment was made by such Lender constituted
gross negligence or wilful misconduct on the part of such Issuer. Each Issuer
shall distribute to each other Lender which has paid all amounts payable by it
under this Section with respect to any Letter of Credit issued by such Issuer
such other Lender's Percentage of all payments received by such Issuer from the
Borrower in reimbursement of drawings honored by such Issuer under such Letter
of Credit when such payments are received.
SECTION 2.6.4 DISBURSEMENTS. Each Issuer will notify the Borrower and
the Canadian Administrative Agent promptly of the presentment for payment of any
Letter of Credit, together with notice of the date (the "DISBURSEMENT DATE")
such payment shall be made. Subject to the terms and provisions of such Letter
of Credit, the applicable Issuer shall make such payment to the beneficiary (or
its designee) of such Letter of Credit. Prior to 11:30 a.m., Toronto, Ontario
time, on the Disbursement Date, the Borrower will reimburse the applicable
Issuer for all amounts which it has disbursed under the Letter of Credit. In the
event the applicable Issuer is not reimbursed by the Borrower on the
Disbursement Date, or if such Issuer must for any reason return or disgorge such
reimbursement, the Lenders (including such Issuer) shall, on the terms and
subject to the conditions of this Agreement, fund the Reimbursement Obligation
therefor by making, on the next Business Day, Loans which are Canadian Prime
Rate Loans, as provided in SECTION 2.1 (the Borrower being deemed to have given
a timely Borrowing Request therefor for such amount); PROVIDED, HOWEVER, that
for the purpose of determining the availability of the Commitments to make Loans
immediately prior to giving effect to the application of the proceeds of such
Loans, such Reimbursement Obligation shall be deemed not to be outstanding at
such time. To the extent the applicable Issuer is not reimbursed in full in
accordance with the preceding sentences, the Borrower's Reimbursement Obligation
shall accrue interest at a fluctuating rate equal to the Canadian Prime Rate
PLUS the Applicable Margin PLUS a margin of 2% per annum, payable on demand.
SECTION 2.6.5 REIMBURSEMENT. The Borrower's obligation (a
"REIMBURSEMENT OBLIGATION") under SECTION 2.6.4 to reimburse an Issuer with
respect to each Disbursement (including interest thereon), and each Lender's
obligation to make participation payments in each drawing which has not been
reimbursed by the Borrower, shall be absolute and unconditional under any and
all circumstances and irrespective of any setoff, counterclaim, or defense to
payment which the Borrower may have or have had against any Lender or any
beneficiary of a Letter of Credit, including any defense based upon the
occurrence of any Default, any draft, demand or certificate or other document
presented under a Letter of Credit proving to be forged, fraudulent, invalid or
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insufficient, the failure of any disbursement to conform to the terms of the
applicable Letter of Credit (if, in the applicable Issuer's good faith opinion,
such disbursement is determined to be appropriate) or any non-application or
misapplication by the beneficiary of the proceeds of such disbursement, or the
legality, validity, form, regularity, or enforceability of such Letter of
Credit; PROVIDED, HOWEVER, that nothing herein shall adversely affect the right
of the Borrower or any Lender to commence any proceeding against the applicable
Issuer for any wrongful disbursement made by such Issuer under a Letter of
Credit as a result of acts or omissions constituting gross negligence or wilful
misconduct on the part of such Issuer.
SECTION 2.6.6 DEEMED DISBURSEMENTS. Upon either (a) the occurrence and
during the continuation of an Event of Default pursuant to SECTION 8.1.9 or the
occurrence of the Commitment Termination Date or (b) the declaration by the
Canadian Administrative Agent of all or any portion of the outstanding principal
amount of the Loans and other Obligations to be due and payable and/or the
Commitments (if not theretofore terminated) to be terminated as provided in
SECTION 8.3, an amount equal to that portion of Letter of Credit Outstandings
attributable to outstanding and undrawn Letters of Credit shall, at the election
of the applicable Issuer acting on instructions from the Required Lenders, and
without demand upon or notice to the Borrower, be deemed to have been paid or
disbursed by such Issuer under such Letters of Credit (notwithstanding that such
amount may not in fact have been so paid or disbursed), and, upon notification
by such Issuer to the Canadian Administrative Agent and the Borrower of its
obligations under this Section, the Borrower shall be immediately obligated to
reimburse such Issuer the amount deemed to have been so paid or disbursed by
such Issuer. Any amounts so received by such Issuer from the Borrower pursuant
to this Section shall be held as collateral security for the repayment of the
Borrower's obligations in connection with the Letters of Credit issued by such
Issuer. All amounts on deposit pursuant to this SECTION 2.6.6 shall, until their
application to any Obligation or their return to the Borrower, as the case may
be, at the Borrower's written request, be invested in high grade short-term
liquid investments acceptable to Canadian Administrative Agent and designated by
the Borrower, which investments shall be held by the Canadian Administrative
Agent as additional collateral security for the repayment of the Borrower's
Obligations under and in connection with the Letters of Credit and all other
Obligations. Any losses, net of earnings, and reasonable fees and expenses of
such investments shall be charged against the principal amount invested. The
Canadian Administrative Agent and the Lenders shall not be liable for any loss
resulting from any investment made by the Canadian Administrative Agent at the
Borrower's request. The Canadian Administrative Agent is not obligated hereby,
or by any other Loan Document, to make or maintain any investment, except upon
written request by the Borrower. At any time when such Letters of Credit shall
terminate and all Obligations to each Issuer are either terminated or paid or
reimbursed to such Issuer in full, the Obligations of the Borrower under this
Section shall be reduced accordingly (subject, however, to reinstatement in the
event any payment in respect of such Letters of Credit is recovered in any
manner from such Issuer), and such Issuer will return to the Borrower the
excess, if any, of (x) the aggregate amount held by such Issuer and not
theretofore applied by such Issuer to any Reimbursement Obligation OVER (y) the
aggregate amount of all Reimbursement Obligations to such Issuer pursuant to
this Section, as so adjusted. At such time when all Events of Default shall have
been cured or waived, if the Revolving Loan Commitment Termination Date shall
not have occurred
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for any reason, each Issuer shall return to the Borrower all amounts then on
deposit with such Issuer pursuant to this Section.
SECTION 2.6.7 NATURE OF REIMBURSEMENT OBLIGATIONS. The Borrower shall
assume all risks of the acts, omissions, or misuse of any Letter of Credit by
the beneficiary thereof. Neither any Issuer nor any Lender (except to the extent
of its own gross negligence or wilful misconduct) shall be responsible for: (a)
the form, validity, sufficiency, accuracy, genuineness, or legal effect of any
Letter of Credit or any document submitted by any party in connection with the
application for and issuance of a Letter of Credit, even if it should in fact
prove to be in any or all respects invalid, insufficient, inaccurate,
fraudulent, or forged; (b) the form, validity, sufficiency, accuracy,
genuineness, or legal effect of any instrument transferring or assigning or
purporting to transfer or assign a Letter of Credit or the rights or benefits
thereunder or proceeds thereof in whole or in part, which may prove to be
invalid or ineffective for any reason; (c) failure of the beneficiary to comply
fully with conditions required in order to demand payment under a Letter of
Credit; (d) errors, omissions, interruptions, or delays in transmission or
delivery of any messages, by mail, cable, telegraph, telex, facsimile or
otherwise; or (e) any loss or delay in the transmission or otherwise of any
document or draft required in order to make a Disbursement under a Letter of
Credit or of the proceeds thereof. None of the foregoing shall affect, impair,
or prevent the vesting of any of the rights or powers granted any Issuer or any
Lender hereunder. In furtherance and extension, and not in limitation or
derogation, of any of the foregoing, any action taken or omitted to be taken by
any Issuer in good faith shall be binding upon the Borrower and shall not put
such Issuer under any resulting liability to the Borrower.
SECTION 2.6.8 INCREASED COSTS; INDEMNITY. If by reason of (a) any
change in applicable law, regulation, rule, decree or regulatory requirement or
any change in the interpretation or application by any judicial or regulatory
authority of any law, regulation, rule, decree or regulatory requirement, or (b)
compliance by any Issuer or any Lender with any direction, or requirement of any
governmental or monetary authority, including Regulation D of the F.R.S. Board:
(i) any Issuer or any Lender shall be subject to any tax (other than taxes on
net income and franchises), levy, charge or withholding of any nature or to any
variation thereof or to any penalty with respect to the maintenance or
fulfillment of its obligations under this SECTION 2.6, whether directly or by
such being imposed on or suffered by such Issuer or such Lender; (ii) any
reserve, deposit or similar requirement is or shall be applicable, increased,
imposed or modified in respect of any Letters of Credit issued by any Issuer or
participations therein purchased by any Lender; or (iii) there shall be imposed
on any Issuer or any Lender any other condition regarding this SECTION 2.6, any
Letter of Credit or any participation therein, and the result of the foregoing
is directly to increase the cost to such Issuer or such Lender of issuing or
maintaining any Letter of Credit or of purchasing or maintaining any
participation therein, or to reduce any amount receivable in respect thereof by
such Issuer or such Lender, then and in any such case such Issuer or such Lender
may, at any time after the additional cost is incurred or the amount received is
reduced, notify the Canadian Administrative Agent and the Borrower thereof, and
the Borrower shall pay within 10 days of demand such amounts as such Issuer or
Lender may in good faith specify to be necessary to compensate such Issuer or
Lender for such additional cost or reduced receipt, together with interest
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on such amount from the date demanded until payment in full thereof at a rate
equal at all times to the Canadian Prime Rate. The determination by such Issuer
or Lender, as the case may be, of any amount due pursuant to this Section, as
set forth in a statement setting forth the calculation thereof in reasonable
detail, shall be rebuttable presumptive evidence of such amounts.
In addition to amounts payable as elsewhere provided in this SECTION
2.6, the Borrower hereby indemnifies, exonerates and holds each Issuer, the
Canadian Administrative Agent and each Lender harmless from and against any and
all actions, causes of action, suits, losses, costs, liabilities and damages,
and expenses incurred in connection therewith (irrespective of whether such
Issuer, the Canadian Administrative Agent or such Lender is a party to the
action for which indemnification is sought), including reasonable attorneys'
fees and disbursements, which such Issuer, the Canadian Administrative Agent or
such Lender may incur or be subject to as a consequence, direct or indirect, of
the issuance of the Letters of Credit, other than as a result of the gross
negligence or wilful misconduct of such Issuer as determined by a court of
competent jurisdiction, or the failure of such Issuer to honor a drawing under
any Letter of Credit as a result of any act or omission, whether rightful or
wrongful, of any present or future de jure or de facto government or
governmental authority.
SECTION 2.7.1 EXTENSION OF CONTINUATION DATE.
(a) Borrower may, at its option and from time to time
during the Revolving Loan Availability Period, request an offer to extend the
Revolving Loan Availability Period by delivering to Canadian Administrative
Agent a Request for an Offer of Extension not more than ninety days and not less
than forty-five days prior to the then-current Continuation Date. Canadian
Administrative Agent shall forthwith provide a copy of the Request for an Offer
of Extension to each of the Lenders. Upon receipt from Canadian Administrative
Agent of an executed Request for an Offer of Extension, each Lender shall,
within thirty days after the date of such Lender's receipt of such request from
Canadian Administrative Agent, either:
(i) notify Canadian Administrative Agent of its
acceptance of the Request for an Offer of Extension, and the terms and
conditions, if any, upon which such Lender is prepared to extend the
Continuation Date; or
(ii) notify Canadian Administrative Agent that
the Request for an Offer of Extension has been denied, such notice to forthwith
be forwarded by Canadian Administrative Agent to Borrower to allow Borrower to
seek a replacement lender pursuant to SECTION 2.8.3 (any Lender giving notice of
such denial is herein called a "NON-ACCEPTING LENDER"). The failure of a Lender
to so notify Canadian Administrative Agent within such thirty day period shall
be deemed to be notification by such Lender to Canadian Administrative Agent
that such Lender has denied Borrower's Request for an Offer of Extension.
(b) Provided that all Lenders provide notice to Canadian
Administrative Agent under SECTION 2.7.1(a) that they accept the Request for an
Offer of Extension, or if there are Non-
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Accepting Lenders, such Lenders shall have been repaid pursuant to SECTION 2.7.3
or replacement lenders shall have become parties hereto pursuant to SECTION
2.7.3 and shall have accepted the Request for an Offer of Extension, such
acceptance having common terms and conditions, Canadian Administrative Agent
shall deliver to Borrower an Offer of Extension incorporating the said terms and
conditions. Such offer shall be open for acceptance by Borrower until the fifth
Business Day immediately preceding the then current Continuation Date. Upon
written notice by Borrower to Canadian Administrative Agent accepting an
outstanding Offer of Extension and agreeing to the terms and conditions, if any,
specified therein (the date of such notice of acceptance in SECTION 2.7.1 and
2.7.3 being called the "EXTENSION DATE"), the Continuation Date shall be
extended to the date 364 days from the Extension Date and the terms and
conditions specified in such Offer of Extension shall be immediately effective.
(c) Borrower understands that the consideration of any
Request for an Offer of Extension constitutes an independent credit decision
which each Lender retains the absolute and unfettered discretion to make and
that no commitment in this regard is hereby given by a Lender and that any offer
to extend the Continuation Date may be on such terms and conditions in addition
to those set out herein as the extending Lenders stipulate.
SECTION 2.7.2 CONTINUATION AS TERM LOAN. Unless there is an extension
of the Revolving Loan Availability Period in accordance with SECTION 2.7.1,
effective at 5:00 p.m. Toronto, Ontario time on the day immediately preceding
the Continuation Date, and PROVIDED, THAT no Event of Default shall have
occurred and be continuing, (a) each Lender's obligation to make new Revolving
Loans and to issue Letters of Credit hereunder shall be canceled automatically,
and (b) each Lender's Revolving Loans shall continue as Term Loans maturing on
the Term Loan Maturity Date.
SECTION 2.7.3 NON-ACCEPTING LENDER. Provided that Lenders whose
Percentage represents more than 50% but less than 100% of the Revolving Loan
Commitment Amount provide notice to Agent under SECTION 2.7.1(a) that they
accept the Request for an Offer of Extension, on notice of Borrower to the
Canadian Administrative Agent, Borrower shall be entitled to choose any of the
following in respect of each Non-Accepting Lender prior to the expiration of the
Revolving Loan Availability Period, PROVIDED, THAT if Borrower does not make an
election prior to the expiration of the Revolving Loan Availability Period,
Borrower shall be deemed to have irrevocably elected to exercise the provisions
of SECTION 2.7.3(b)(ii):
(a) (i) the Non-Accepting Lender's obligations to make Loans shall
be canceled as of the Extension Date, the Revolving Loan Commitment Amount shall
be reduced by the amount so canceled, and on or prior to the Extension Date the
Borrower shall repay in full all Obligations then outstanding to the
Non-Accepting Lender (as defined in SECTION 2.7.1(a)(ii)), or (ii) replace the
Non-Accepting Lender by reaching satisfactory arrangements with one or more
existing Lenders or new Lenders, for the purchase, assignment and assumption of
all Obligations hereunder and Obligations under the U.S. Credit Agreement of the
Non-Accepting Lender, PROVIDED, THAT any new Lender, with, if necessary, any
Affiliate, shall take a pro rata assignment of both Obligations hereunder and
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Obligations under the U.S. Credit Agreement, and such Non-Accepting Lender shall
be obligated to sell such Obligations in accordance with such satisfactory
arrangements; or
(b) Borrower may elect to revoke and cancel the Request for an
Offer of Extension by giving notice of such revocation and cancellation to
Canadian Administrative Agent (which shall promptly notify the Lenders thereof),
and concurrently therewith, shall have the option to (i) cancel the obligations
of Lenders under the Agreement and, subject to the notice requirements set forth
in SECTION 2.7.1(a) and to the provisions of ARTICLE III, repay in full all
Obligations, or (ii) have the outstanding Revolving Loans on the Continuation
Date become Term Loans as provided in SECTION 2.7.2.
In connection with any such replacement of a Lender pursuant to this SECTION
2.7.3, the Borrower shall pay all costs that would have been due to such Lender
pursuant to SECTION 4.4 if such Lender's Loans had been prepaid at the time of
such replacement.
ARTICLE III
REPAYMENTS, PREPAYMENTS, INTEREST AND FEES
SECTION 3.1 REPAYMENTS AND PREPAYMENTS.
(a) GENERAL. The Borrower shall repay in full the unpaid
principal amount of each Loan upon the Stated Maturity Date therefor. Each
prepayment of any Loans made pursuant to this Section shall be without premium
or penalty, except as may be required by SECTION 4.4.
(b) PRINCIPAL REPAYMENT. After the Continuation Date, the
Borrower shall repay the principal of and interest on the Loans as follows: The
Borrower shall repay the principal of the Loans in equal semi-annual
installments, each in an amount equal to two and one-half percent (2.5%) of the
outstanding principal balance of the Loans on the Continuation Date. Such
installments shall be due and payable on each June 30 and December 31 each year
and in a final installment due and payable on the Term Loan Maturity Date in an
amount equal to the entire unpaid principal balance of the Loans outstanding on
the Term Loan Maturity Date.
(c) INCOME TAX ACT (CANADA). Notwithstanding any other
term or provision herein or in any other Loan Document, and except as otherwise
provided in SECTION 8.1, in no event shall the Borrower be required to repay
more than 25% of the principal amount (as defined in the Income Tax Act
(Canada)) of any Loan made to it prior to five years and a day after the
Continuation Date.
SECTION 3.1.1 OPTIONAL PREPAYMENT. At any time prior to the Stated
Maturity Date, the Borrower may, from time to time on any Business Day, make a
voluntary prepayment, in whole or in part, of the outstanding principal amount
of any Loans; PROVIDED, HOWEVER, that (a) any such prepayment shall be made PRO
RATA among Loans of the same type and, if applicable, having the same Interest
Period of all Lenders, (b) no such prepayment of any LIBO Rate Loan may be made
on any day other than the last day of the Interest Period for such Loan, (c) all
such voluntary prepayments (i)
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of LIBO Rate Loans, shall require at least three (3) Business Days' prior
written notice to the Canadian Administrative Agent, and (ii) of Canadian Prime
Rate Loans, shall require at least one (1) Business Day's prior written notice
to the Canadian Administrative Agent, and (d) all such voluntary partial
prepayments shall be in an aggregate minimum amount of Cdn. $1,000,000, and
greater integral multiples of Cdn. $500,000.
SECTION 3.1.2 MANDATORY PREPAYMENT; CURRENCY FLUCTUATIONS. If for any
reason the outstanding amount of all Loans and Reimbursement Obligations at any
time outstanding exceeds the Commitment Amount then in effect, the Borrower
shall immediately prepay Loans and if any such excess remains after such
prepayment, the Borrower shall immediately cash collateralize the Reimbursement
Obligations in an amount equal to the stated amount of all Letters of Credit
outstanding and undrawn in an aggregate amount equal to such excess.
SECTION 3.1.3 MANDATORY PREPAYMENT ON ACCELERATION. The Borrower shall,
immediately upon any acceleration of the Stated Maturity Date of any Loans
pursuant to SECTION 8.2 or SECTION 8.3, repay all Loans, unless, pursuant to
SECTION 8.3, only a portion of all Loans is so accelerated.
SECTION 3.1.4 PREPAYMENTS OF TERM LOANS. All prepayments of the Term
Loan shall be applied to installments of principal on a pro rata basis.
SECTION 3.2 INTEREST PROVISIONS. Interest on the outstanding principal
amount of Loans shall accrue and be payable in accordance with this SECTION 3.2.
SECTION 3.2.1 RATES. Pursuant to an appropriately delivered Borrowing
Request or Continuation/Conversion Notice, the Borrower may elect that Loans
comprising a Borrowing accrue interest at a rate per annum: (a) on that portion
maintained from time to time as a Canadian Prime Rate Loan, equal to the
Canadian Prime Rate PLUS the Applicable Margin from time to time in effect; and
(b) on that portion maintained as a LIBO Rate Loan, during each Interest Period
applicable thereto, equal to the sum of the LIBO Rate (Reserve Adjusted) for
such Interest Period PLUS the Applicable Margin.
All LIBO Rate Loans shall bear interest from and including the
first day of the applicable Interest Period to (but not including) the last day
of such Interest Period at the interest rate determined as applicable to such
LIBO Rate Loan.
SECTION 3.2.2 DEFAULT RATE. While any Event of Default exists or after
acceleration, the Borrower shall pay upon demand interest (after as well as
before judgment) on the principal amount of all outstanding Obligations at a
fluctuating rate per annum equal to the Canadian Prime Rate PLUS the Applicable
Margin PLUS 2%; PROVIDED, HOWEVER, that with respect to a LIBO Rate Loan, the
Default Rate shall be an interest rate equal to the interest rate (including any
Applicable Margin) otherwise applicable to such Loan PLUS 2% per annum, but in
any event not to exceed the maximum rate permitted by applicable law.
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SECTION 3.2.3 PAYMENT DATES. Interest accrued on each Loan shall be
payable, without duplication: (a) on the Stated Maturity Date therefor; (b) on
the date of any payment or prepayment, in whole or in part, of principal
outstanding on such Loan; (c) with respect to Canadian Prime Rate Loans, on each
Quarterly Payment Date occurring after the Effective Date; (d) with respect to
LIBO Rate Loans, the last day of each applicable Interest Period (and, if such
Interest Period shall exceed 90 days, on the 90th day of such Interest Period);
(e) with respect to any Canadian Prime Rate Loans converted into LIBO Rate Loans
on a day when interest would not otherwise have been payable pursuant to CLAUSE
(c), on the date of such conversion; and (f) on that portion of any Loans the
Stated Maturity Date of which is accelerated pursuant to SECTION 8.2 or SECTION
8.3, immediately upon such acceleration. Interest accrued on Loans or other
monetary Obligations arising under this Agreement or any other Loan Document
after the date such amount is due and payable (whether on the Stated Maturity
Date, upon acceleration or otherwise) shall be payable upon demand.
SECTION 3.2.4 [INTENTIONALLY LEFT BLANK]
SECTION 3.3 FEES. The Borrower agrees to pay the fees set forth in this
SECTION 3.3. All such fees shall be non-refundable.
SECTION 3.3.1 COMMITMENT FEE. The Borrower agrees to pay to the
Canadian Administrative Agent for the account of each Lender, for the period
(including any portion thereof when any of its Commitments are suspended by
reason of the Borrower's inability to satisfy any condition of ARTICLE V)
commencing on the Effective Date and continuing through the final Revolving Loan
Commitment Termination Date, a Commitment Fee on such Lender's Percentage of the
sum of the average daily unused portion of the Revolving Loan Commitment Amount
(outstanding Loans and Letters of Credit being deemed to be usage hereunder).
Such Commitment Fee shall be payable by the Borrower in arrears, on each
Quarterly Payment Date, commencing with the first such day following the
Effective Date, and on the Revolving Loan Commitment Termination Date.
SECTION 3.3.2 CANADIAN ADMINISTRATIVE AGENT'S FEE. The Borrower agrees
to pay the fees provided in the fee letter dated August 10, 2001 between the
Borrower, the Canadian Administrative Agent and Banc of America Securities LLC.
SECTION 3.3.3 LETTER OF CREDIT FEES. (a) The Borrower agrees to pay to
the Canadian Administrative Agent, for the account of each Lender, a fee for
each Letter of Credit for the period from and including the date of the issuance
of such Letter of Credit to (but not including) the date upon which such Letter
of Credit expires, at a per annum rate equal to the Applicable Margin on the
outstanding face amount of each Letter of Credit. Such fee shall be payable by
the Borrower in arrears on each Quarterly Payment Date, and on the Revolving
Loan Commitment Termination Date for any period then ending for which such fee
shall not theretofore have been paid, commencing on the first such date after
the issuance of such Letter of Credit.
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(b) The Borrower agrees to pay to the Canadian Administrative
Agent, for the account of the Issuer, (i) a Letter of Credit fronting fee for
each Letter of Credit upon the issuance of each Letter of Credit in an amount
equal to the greater of (A) Cdn. $500 or (B) one-eight of one percent (1/8 of
1%) calculated on the face amount thereof, and (ii) such Issuer's standard
drawing fees and other processing fees upon any drawing under such Letter of
Credit.
ARTICLE IV
CERTAIN LIBO RATE AND OTHER PROVISIONS
SECTION 4.1 FIXED RATE LENDING UNLAWFUL. If any Lender shall determine
(which determination shall, upon notice thereof to the Borrower and the Lenders,
be conclusive and binding on the Borrower) that the introduction of or any
change in or in the interpretation of any law makes it unlawful, or any central
bank or other governmental authority asserts that it is unlawful, for such
Lender to make, continue or maintain any Loan as, or to convert any Loan into, a
LIBO Rate Loan of a certain type, the obligations of all Lenders to make,
continue, maintain or convert any such Loans shall, upon such determination,
forthwith be suspended until such Lender shall notify the Canadian
Administrative Agent that the circumstances causing such suspension no longer
exist, and all LIBO Rate Loans of such type shall automatically convert into
Canadian Prime Rate Loans at the end of the then current Interest Periods with
respect thereto or sooner, if required by such law or assertion.
SECTION 4.2 DEPOSITS UNAVAILABLE. If the Canadian Administrative Agent
shall have determined that (a) Cdn. Dollar deposits in the relevant amount and
for the relevant Interest Period are not available to the Lenders in their
relevant markets; or (b) by reason of circumstances affecting BofA Canada's
relevant market, adequate means do not exist for ascertaining the interest rate
applicable hereunder to LIBO Rate Loans, then, upon notice from the Canadian
Administrative Agent to the Borrower and the Lenders, the obligations of all
Lenders under SECTION 2.3 and SECTION 2.4 to make or continue any Loans as, or
to convert any Loans into, LIBO Rate Loans shall forthwith be suspended until
the Canadian Administrative Agent shall notify the Borrower and the Lenders that
the circumstances causing such suspension no longer exist.
SECTION 4.3 INCREASED LIBO RATE LOAN COSTS, ETC. The Borrower agrees to
reimburse each Lender for any increase in the cost to such Lender of, or any
reduction in the amount of any sum receivable by such Lender in respect of,
making, continuing or maintaining (or of its obligation to make, continue or
maintain) any Loans as, or of converting (or of its obligation to convert) any
Loans into, LIBO Rate Loans. Such Lender shall promptly notify the Canadian
Administrative Agent and the Borrower in writing of the occurrence of any such
event, such notice to state, in reasonable detail, the reasons therefor and the
additional amount required fully to compensate such Lender for such increased
cost or reduced amount; provided, that no Lender shall give such notice unless
it is generally charging borrowers similarly situated to the Borrower with
similar agreements with such Lender such amounts. Such additional amounts shall
be payable by the Borrower directly to such Lender within five days of its
receipt of such notice, and such notice shall be rebuttable presumptive evidence
of such amounts.
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SECTION 4.4 FUNDING LOSSES. In the event any Lender shall incur any
loss, cost or expense as a result of (a) any conversion or repayment or
prepayment of the principal amount of any LIBO Rate Loans on a date other than
the scheduled last day of the Interest Period applicable thereto, whether
pursuant to Section 3.1 or otherwise; (b) any Loans not being made as LIBO Rate
Loans or Canadian Prime Rate Loan in accordance with the Borrowing Request
therefor; or (c) any Loans not being continued as, or converted into, LIBO Rate
Loans in accordance with the Continuation/ Conversion Notice therefor, then,
upon the written notice of such Lender to the Borrower (with a copy to the
Canadian Administrative Agent), the Borrower shall, within five days of its
receipt thereof, pay directly to such Lender such amount as will (in the
reasonable determination of such Lender) reimburse such Lender for such loss,
cost or expense. Such written notice (which shall include calculations in
reasonable detail) and shall be rebuttable presumptive evidence of such amounts.
The amounts calculated pursuant to this Section 4.4 shall include any loss, cost
or expense incurred by a Lender in connection with any foreign exchange
agreement, and any loss, cost or expense incurred by reason of the liquidation
or reemployment of deposits or other funds acquired by such Lender to make,
continue or maintain any portion of the principal amount of any Loan as, or to
convert any portion of the principal amount of any Loan into, a LIBO Rate Loan.
SECTION 4.5 INCREASED CAPITAL COSTS. If any change in, or the
introduction, adoption, effectiveness, interpretation, reinterpretation or
phase-in of, any law or regulation, directive, guideline, decision or request of
any court, central bank, regulator or other governmental authority affects or
would affect the amount of capital required or expected to be maintained by any
Lender or any Person controlling such Lender, and such Lender determines (in its
discretion exercised in good faith) that the rate of return on its or such
controlling Person's capital as a consequence of its Commitments or the Loans
made by such Lender is reduced to a level below that which such Lender or such
controlling Person could have achieved but for the occurrence of any such
circumstance, then, in any such case upon notice from time to time by such
Lender to the Borrower, the Borrower shall immediately pay directly to such
Lender additional amounts sufficient to compensate such Lender or such
controlling Person for such reduction in rate of return. A statement of such
Lender as to any such additional amount or amounts shall be furnished to
Borrower including calculations thereof in reasonable detail and shall be
rebuttable presumptive evidence of such amounts. In determining such amount,
such Lender may use any method of averaging and attribution that it (in its
discretion exercised in good faith) shall deem applicable.
SECTION 4.6 TAXES. All payments by the Borrower of principal of, and
interest on, the Loans, all payments in respect of the Reimbursement Obligations
and all other amounts payable hereunder shall be made free and clear of and
without deduction for any present or future excise, stamp or franchise taxes and
other taxes, fees, duties, withholdings or other charges of any nature
whatsoever imposed by any taxing authority, but excluding franchise taxes and
taxes imposed on or measured by any Lender's net income or receipts by the
jurisdiction (or any political subdivision thereof) under the laws of which such
Lender is organized or maintains an office from which Loans are funded (such
non-excluded items being called "TAXES"). In the event that any withholding or
deduction from any payment to be made by the Borrower hereunder is required in
respect of any
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Taxes pursuant to any applicable law, rule or regulation, then the Borrower will
(a) pay directly to the relevant authority the full amount required to be so
withheld or deducted; (b) promptly forward to the Canadian Administrative Agent
an official receipt or other documentation satisfactory to the Canadian
Administrative Agent evidencing such payment to such authority; and (c) pay to
the Canadian Administrative Agent for the account of the Lenders such additional
amount or amounts as is necessary to ensure that the net amount actually
received by each Lender will equal the full amount such Lender would have
received had no such withholding or deduction been required. Moreover, if any
Taxes are directly asserted against the Canadian Administrative Agent or any
Lender with respect to any payment received by the Canadian Administrative Agent
or such Lender hereunder, the Canadian Administrative Agent or such Lender may
pay such Taxes and the Borrower will promptly pay such additional amounts
(including, if incurred as a result of the Borrower's action, omission or delay,
any penalties, interest or expenses) as is necessary in order that the net
amount received by such person after the payment of such Taxes (including any
Taxes on such additional amount) shall equal the amount such person would have
received had not such Taxes been asserted.
If the Borrower fails to pay any Taxes when due to the
appropriate taxing authority or fails to remit to the Canadian Administrative
Agent, for the account of the respective Lenders, the required receipts or other
required documentary evidence, the Borrower shall indemnify the Lenders for any
incremental Taxes, interest or penalties that may become payable by any Lender
as a result of any failure of Borrower to pay the taxing authorities directly
where required. For purposes of this SECTION 4.6, a distribution hereunder by
the Canadian Administrative Agent or any Lender to or for the account of any
Lender shall be deemed a payment by the Borrower.
SECTION 4.7 PAYMENTS, COMPUTATIONS, ETC. Unless otherwise expressly
provided, all payments by the Borrower pursuant to this Agreement, the Notes or
any other Loan Document shall be made by the Borrower to the Canadian
Administrative Agent for the PRO RATA account of the Lenders entitled to receive
such payment. All such payments required to be made to the Canadian
Administrative Agent shall be made, without setoff, deduction or counterclaim,
not later than 11:00 a.m., Toronto, Ontario time, on the date due, in same day
or immediately available funds, to such account as the Canadian Administrative
Agent shall specify from time to time by notice to the Borrower. Funds received
after that time shall be deemed to have been received by the Canadian
Administrative Agent on the next succeeding Business Day. The Canadian
Administrative Agent shall promptly remit in same day funds to each Lender its
share, if any, of such payments received by the Canadian Administrative Agent
for the account of such Lender. All interest and fees shall be computed on the
basis of the actual number of days (including the first day but excluding the
last day) occurring during the period for which such interest or fee is payable
over a year comprised of 360 days (which results in more interest being paid
than if computed on the basis of a 365-day year) or, in the case of interest on
a Canadian Prime Rate Loan, 365 days or, if appropriate, 366 days. Whenever any
payment to be made shall otherwise be due on a day which is not a Business Day,
such payment shall (except as otherwise required by CLAUSE (c) of the definition
of the term "INTEREST PERIOD" with respect to LIBO Rate Loans) be made on the
next succeeding Business Day and such extension of time shall be included in
computing interest and fees, if any, in connection with such
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payment. Each rate of interest which is calculated with reference to a period
(the "DEEMED INTEREST PERIOD") that is less than the actual number of days in
the calendar year of calculation is, for the purposes of the Interest Act
(Canada), equivalent to a rate based on a calendar year calculated by
multiplying such rate of interest by the actual number of days in the calendar
year of calculation and dividing by the number of days in the deemed interest
period.
SECTION 4.8 SHARING OF PAYMENTS. If any Lender shall obtain any payment
or other recovery (whether voluntary, involuntary, by application of setoff or
otherwise) on account of any Loan, any Reimbursement Obligation or any other
Obligation (other than pursuant to the terms of SECTIONS 4.3, 4.4 and 4.5) in
excess of its PRO RATA share of payments then or therewith obtained by all
Lenders, such Lender shall purchase from the other Lenders such participations
as shall be necessary to cause such purchasing Lender to share the excess
payment or other recovery ratably with each of them; PROVIDED, HOWEVER, that if
all or any portion of the excess payment or other recovery is thereafter
recovered from such purchasing Lender, the purchase shall be rescinded and each
Lender which has sold a participation to the purchasing Lender shall repay to
the purchasing Lender the purchase price to the ratable extent of such recovery
together with an amount equal to such selling Lender's ratable share (according
to the proportion of (a) the amount of such selling Lender's required repayment
to the purchasing Lender (b) the total amount so recovered from the purchasing
Lender) of any interest or other amount paid or payable by the purchasing Lender
in respect of the total amount so recovered. The Borrower agrees that any Lender
so purchasing a participation from another Lender pursuant to this Section may,
to the fullest extent permitted by law, exercise all its rights of payment
(including pursuant to SECTION 4.9) with respect to such participation as fully
as if such Lender were the direct creditor of the Borrower in the amount of such
participation. If under any applicable bankruptcy, insolvency or other similar
law, any Lender receives a secured claim in lieu of a setoff to which this
Section applies, such Lender shall, to the extent practicable, exercise its
rights in respect of such secured claim in a manner consistent with the rights
of the Lenders entitled under this Section to share in the benefits of any
recovery on such secured claim.
SECTION 4.9 SETOFF. Upon the occurrence of an Event of Default, each
Lender shall be entitled to exercise (for the benefit of all Lenders pursuant to
SECTION 4.8) any right of offset or bankers' lien against each and every account
and other property or interest therein that the Borrower or any Obligor may now
or hereafter have with, or which is now or hereafter in the possession of, such
Lender, to the extent of the full amount of the Obligations. To secure the
Obligations, the Borrower hereby grants to each Lender a continuing security
interest in any and all balances, credits, deposits, accounts or moneys of the
Borrower then or thereafter maintained with such Lender; PROVIDED, HOWEVER, that
any exercise of such security interest shall be subject to the provisions of
SECTION 4.8. Each Lender agrees promptly to notify the Borrower and the Canadian
Administrative Agent after any such setoff and application made by such Lender;
PROVIDED, HOWEVER, that the failure to give such notice shall not affect the
validity of such setoff and application. The rights of each Lender under this
Section are in addition to other rights and remedies (including other rights of
setoff under applicable law or otherwise) which such Lender may have.
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SECTION 4.10. CURRENCY CONVERSION AND CURRENCY INDEMNITY.
(a) Each Obligor shall make payment relative to any Obligation in
the currency (the "AGREED CURRENCY") in which the Obligation was incurred. If
any payment is received on account of any Obligation in any currency (the "OTHER
CURRENCY") other than the Agreed Currency (whether voluntarily, pursuant to any
conversion of a Loan or pursuant to an order or judgment or the enforcement
thereof or the realization of any security or the liquidation of such Obligor or
otherwise howsoever), such payment shall constitute a discharge of the liability
of an Obligor hereunder and under the other Loan Documents in respect of such
Obligation only to the extent of the amount of the Agreed Currency which the
Canadian Administrative Agent and Lenders are able to purchase with the amount
of the Other Currency received by it on the Business Day next following such
receipt in accordance with its normal procedures and after deducting any premium
and costs of exchange.
(b) If for the purpose of obtaining or enforcing judgment in any
court in any jurisdiction, it becomes necessary to convert into a particular
currency (the "JUDGMENT CURRENCY") any amount due in the Agreed Currency then
the conversion shall be made on the basis of the rate of exchange prevailing on
the next Business Day following the date such judgment is given and in any event
each Obligor shall be obligated to pay the Canadian Administrative Agent and
Lenders any deficiency in accordance with Section 4.10(c). For the foregoing
purposes, "rate of exchange" means the Noon Rate, after deducting any premium
and costs of exchange.
(c) If the Canadian Administrative Agent or any Lender receives
any payment or payments on account of the liability of an Obligor hereunder
pursuant to any judgment or order in any Other Currency, and the amount of the
Agreed Currency which the relevant Canadian Administrative Agent or Lender is
able to purchase on the Business Day next following such receipt with the
proceeds of such payment or payments in accordance with its normal procedures
and after deducting any premiums and costs of exchange is less than the amount
of the Agreed Currency due in respect of such Obligations immediately prior to
such judgment or order, then Borrower on demand shall indemnify and save such
Canadian Administrative Agent and Lenders harmless from and against any loss,
cost or expense arising out of or in connection with such deficiency. The
agreement of indemnity provided for in this SECTION 4.10(c) shall constitute an
obligation separate and independent from all other obligations contained in this
Agreement, shall give rise to a separate and independent cause of action, shall
apply irrespective of any indulgence granted by the Canadian Administrative
Agent and the Lenders or any of them from time to time, and shall continue in
full force and effect notwithstanding any judgment or order for a liquidated sum
in respect of an amount due hereunder or under any judgment or order.
ARTICLE V
CONDITIONS TO BORROWING
SECTION 5.1 INITIAL BORROWING. The obligations of the Lenders to fund
the initial Borrowing and to issue the initial Letter of Credit shall be subject
to the prior or concurrent
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satisfaction of each of the conditions precedent set forth in this SECTION 5.1.
All certificates, agreements, opinions and other documents delivered shall be in
form and substance satisfactory to the Canadian Administrative Agent.
SECTION 5.1.1 RESOLUTIONS, ETC. The Canadian Administrative Agent shall
have received from each Obligor a certificate, dated the date of the initial
Borrowing or the issuance of the initial Letter of Credit or of such
continuation, of its secretary, assistant secretary, manager or general partner
as applicable as to (a) resolutions of its Board of Directors, Managers, or
their equivalent then in full force and effect authorizing the execution,
delivery and performance of this Agreement, the Notes and each other Loan
Document to be executed by it, (b) the articles or certificate of incorporation
or organization for such Obligor, (c) the bylaws, operating agreements, or
partnership agreement of such Obligor, and (d) the incumbency and signatures of
those of its officers authorized to act with respect to this Agreement, the
Notes and each other Loan Document executed by it, upon which certificate each
Lender may conclusively rely until it shall have received a further certificate
of the secretary, manager or general partner as applicable of such Obligor
canceling or amending such prior certificate. The Canadian Administrative Agent
shall have received from each Obligor certificates of existence and good
standing provided by the appropriate governmental officer in its jurisdiction of
incorporation and, in the case of certificates of good standing, in each
jurisdiction in which its business is conducted.
SECTION 5.1.2 DELIVERY OF THIS AGREEMENT; "EFFECTIVE DATE" UNDER U.S.
CREDIT AGREEMENT. The Canadian Administrative Agent shall have received (a) this
Agreement and the Notes issued pursuant hereto, duly executed by each party
thereto, and in each case in form and substance satisfactory to the Canadian
Administrative Agent, and (b) evidence satisfactory to it that the "Effective
Date" under the U.S. Credit Agreement shall have occurred.
SECTION 5.1.3 GUARANTY AGREEMENTS. The Administrative Agent or the
Canadian Administrative Agent shall have received the following, each dated as
of the date hereof: (a) a guaranty agreement duly executed by, and from each of,
MarkWest Michigan, West Shore, Basin, Matrex, and MarkWest Resources, each
substantially in the form attached as Exhibit G to the U.S. Credit Agreement,
and (b) a Guaranty executed by, and from each of, the Parent and Midstream
Services.
SECTION 5.1.4 COLLATERAL DOCUMENTS. The Canadian Administrative Agent
shall have received executed counterparts of (a) the Collateral Documents
described on SCHEDULE II, and (b) to the extent not previously delivered to Bank
of America, N.A., as Administrative Agent, certificates evidencing all of the
issued and outstanding shares of capital stock, partnership interests, or
membership interests pledged pursuant thereto, which certificates shall in each
case be accompanied by undated stock powers duly executed in blank.
SECTION 5.1.5 CLOSING CERTIFICATE. The Canadian Administrative Agent
shall have received a certificate signed by an Authorized Officer of the
Borrower certifying (a) that the conditions specified in ARTICLE V have been
satisfied, (b) no Default or Event of Default exists, and
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(c) since December 31, 2000 there has occurred no event or circumstance which
could reasonably be expected to have a Material Adverse Effect, (d) except as
set forth on Schedule I to the U.S. Credit Agreement, no litigation or action
exists or is pending or threatened which could reasonably be expected to have
a Material Adverse Effect, and (e) since the consummation of the acquisition
of the Acquired Companies, there has occurred no event or circumstances which
could reasonably be expected to have a material adverse effect on the assets,
business, properties, financial condition or prospects, or results of
operations of the Borrower or the Borrower and its Subsidiaries taken as a
whole, or the ability of the Borrower or any other Obligor to perform its
obligations under any of the Loan Documents.
SECTION 5.1.6 OPINIONS OF COUNSEL. The Canadian Administrative Agent
shall have received the following, each dated the Effective Date and addressed
to the Canadian Administrative Agent and all Lenders: (a) legal opinions from
Davis, Graham & Stubbs LLP and from Barry Spector, counsel to the Borrower and
its Subsidiaries, substantially in the form of EXHIBIT E-1 and EXHIBIT E-4
hereto, (b) a legal opinion from Baker Botts LLP, Texas counsel to the Borrower
and its Subsidiaries, substantially in the form of EXHIBIT E-3 hereto, (c) a
legal opinion from Fraser Milner Casgrain LLP, Canadian Counsel to the Borrower
and its Subsidiaries, substantially in the form of EXHIBIT E-2 hereto, and (d)
such opinions of local counsel as the Canadian Administrative Agent shall
require.
SECTION 5.1.7 CLOSING FEES, EXPENSES, ETC. All fees and expenses to be
paid on or before the Effective Date shall have been paid, including attorneys'
fees and expenses to the extent invoiced prior to the Effective Date.
SECTION 5.1.8 EVIDENCE OF INSURANCE. The Canadian Administrative Agent
shall have received certificates of insurance satisfactory to it evidencing the
existence of all insurance required to be maintained by the Borrower by this
Agreement and the other Loan Documents, which insurance shall list Canadian
Administrative Agent as additional insured and a loss payee and be satisfactory
to the Canadian Administrative Agent.
SECTION 5.1.9 PROJECTIONS. The Canadian Administrative Agent shall have
received the projections described in SECTION 5.1.12 of the U.S. Credit
Agreement.
SECTION 5.1.10 TITLE. The Canadian Administrative Agent shall have
received (a) such title information as the Canadian Administrative Agent may
require setting forth the status of title acceptable to the Canadian
Administrative Agent to at least 75% of the value of the Borrower's and its
Subsidiaries' Oil and Gas Properties included in the Initial Reserve Reports,
and (b) such title information as the Canadian Administrative Agent may require
setting forth the status of title acceptable to the Canadian Administrative
Agent to the Borrower's and its Subsidiaries' real estate and facilities.
SECTION 5.1.11 INITIAL RESERVE REPORT. The Canadian Administrative
Agent shall have received the Initial Reserve Reports in form and substance
satisfactory to the Lenders.
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SECTION 5.1.12 ENVIRONMENTAL REPORTS. The Canadian Administrative Agent
and the Lenders shall have received environmental assessment reports relating to
assets of the Borrower and its Subsidiaries, and the Lenders shall be satisfied
with the reports.
SECTION 5.1.13 FINANCIAL STATEMENTS. The Canadian Administrative Agent
shall have received and, in each case, approved the following financial
statements:
(i) With respect to the Parent, audited
consolidated financial statements for the fiscal years ended
1998, 1999 and 2000, including balance sheets, income and cash
flow statements audited by independent public accountants of
recognized national standing and prepared in conformity with
GAAP, quarterly financial statements for the first two Fiscal
Quarters of 2001, interim monthly financial statements for the
months January 2001 through June 2001, monthly working capital
needs for 2001 and quarterly for 2002, and a budget for the
fiscal year 2001.
(ii) Pro forma consolidated balance sheet of the
Parent and its Subsidiaries as of June 30, 2001 after giving
effect to the Canadian Acquisition.
(iii) Such other financial information as the
Canadian Administrative Agent may request.
SECTION 5.1.14 INCENTIVE PAYMENTS AGREEMENT. The Administrative Agent
shall have received a copy of the Incentive Payments Agreement delivered
pursuant to SECTION 5.1.17 of the U.S. Credit Agreement.
SECTION 5.1.15 HEDGING AGREEMENTS. The Parent shall have entered into
commodity price protection agreements containing terms, and with counterparties,
satisfactory to the Canadian Administrative Agent, covering volumes of not less
than 70% of the reasonably estimated projected production of the Borrower's and
its Subsidiaries' Canadian Oil and Gas Properties, as determined by reference to
the Initial Reserve Reports, during the period from the Effective Date of the
U.S. Credit Agreement and ending on December 31, 2004.
SECTION 5.1.16 OTHER. The Canadian Administrative Agent shall have
received such other assurances, certificates, documents, consents or opinions as
the Canadian Administrative Agent or the Required Lenders may require.
SECTION 5.2 CONDITIONS PRECEDENT TO TERM LOAN. The obligation of the
Lenders to make the Term Loan shall, in addition to the conditions precedent
specified in SECTION 5.3, be subject to the prior or concurrent satisfaction of
each of the conditions precedent set forth in this SECTION 5.2.
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SECTION 5.2.1 REVOLVING LOANS CONTINUED AS TERM LOANS. Subject to the
terms and conditions of SECTION 2.7.2, the principal of and accrued interest on
the Revolving Loans shall be continued as Term Loans hereunder, and included
under the Term Loan Commitment prior to or concurrently with the continuation of
each Lender's Revolving Loan as a Term Loan to the Borrower as provided in
SECTION 2.1.4.
SECTION 5.2.2 CONFIRMATORY CERTIFICATE. The Canadian Administrative
Agent shall have received a certificate, in form and substance satisfactory to
the Canadian Administrative Agent, dated the Continuation Date and signed by an
officer of the Borrower acceptable to the Canadian Administrative Agent, as to
the matters set forth in SECTION 5.3.1 and such other documents as the Lender
may have reasonably requested in support thereof, including, duly executed and
updated copies or other confirmations of the continuing effectiveness of any or
all of the Loan Documents.
SECTION 5.3 ALL BORROWINGS. The obligation of each Lender to fund any
Loan on the occasion of any Borrowing (including the initial Borrowing) and to
issue any Letter of Credit (including the initial Letter of Credit) shall be
subject to the satisfaction of each of the conditions precedent set forth in
this SECTION 5.3.
SECTION 5.3.1 COMPLIANCE WITH WARRANTIES, NO DEFAULT, ETC. Both before
and after giving effect to any Borrowing or Letter of Credit (but, if any
Default of the nature referred to in SECTION 8.1.5 shall have occurred with
respect to any other Indebtedness, without giving effect to the application,
directly or indirectly, of the proceeds thereof) the following statements shall
be true and correct in all material respects (a) the representations and
warranties set forth in ARTICLE VI and in each Collateral Document shall be true
and correct with the same effect as if then made (unless stated to relate solely
to an earlier date, in which case such representations and warranties shall be
true and correct as of such earlier date); (b) except as disclosed by the
Borrower to the Canadian Administrative Agent and the Lenders pursuant to
SECTION 6.7, (i) no labor controversy, litigation, arbitration or governmental
investigation or proceeding shall be pending or, to the knowledge of the
Borrower, threatened against the Parent, Borrower or any of their Subsidiaries
which could reasonably be expected to materially adversely affect the Parent's,
Borrower's and their Subsidiaries' consolidated business, operations, assets,
revenues, properties or prospects or which purports to affect the legality,
validity or enforceability of this Agreement, the Notes or any other Loan
Document; and (ii) no development shall have occurred in any labor controversy,
litigation, arbitration, environmental or governmental investigation or
proceeding disclosed pursuant to SECTION 6.7 which could reasonably be expected
to materially adversely affect the consolidated businesses, operations, assets,
revenues, properties or prospects of the Parent, Borrower and their
Subsidiaries; and (c) no Default shall have then occurred and be continuing, and
neither the Parent, Borrower, any other Obligor, nor any of their Subsidiaries
are in violation of any law or governmental regulation or court order or decree,
which would have a Material Adverse Effect.
SECTION 5.3.2 BORROWING REQUEST. (a) The Canadian Administrative Agent
shall have received a Borrowing Request signed by both the Borrower and the
Parent for such Borrowing or Issuance Request for such Letter of Credit, as the
case may be. Each of the delivery of a
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Borrowing Request or Issuance Request for such Letter of Credit, as the case may
be, and the acceptance by the Borrower of the proceeds of such Borrowing or such
Letter of Credit shall constitute a representation and warranty by both the
Borrower and the Parent that on the date of such Borrowing (both immediately
before and after giving effect to such Borrowing and the application of the
proceeds thereof) the statements made in SECTION 5.3.1 are true and correct.
(b) In addition, if Borrower is unable to make the
representations and warranties set forth in paragraph 5 of the form of Borrowing
Request attached hereto as EXHIBIT B, then Borrower shall deliver to the
Canadian Administrative Agent, not less than ten (10) days prior to the date of
requested Borrowing or Issuance Request, a certificate (a "REGULATION U
COMPLIANCE CERTIFICATE") in form and substance satisfactory to the Canadian
Administrative Agent setting forth calculations demonstrating compliance with
Regulation U and, if required by the Canadian Administrative Agent, an opinion
of counsel (a "REGULATION U OPINION") in form and substance satisfactory to the
Canadian Administrative Agent stating that the Lenders and the Borrowers are,
and after the requested Borrowing or Issuance will be, in compliance with
Regulation U.
SECTION 5.3.3 SATISFACTORY LEGAL FORM. All documents executed or
submitted pursuant hereto by or on behalf of the Borrower or any of its
Subsidiaries or any other Obligors shall be satisfactory in form and substance
to the Canadian Administrative Agent and its counsel (which satisfaction is
acknowledged with respect to any documents conforming to the respective exhibit
attached hereto); and the Canadian Administrative Agent and its counsel shall
have received all information, approvals, opinions, documents or instruments as
the Canadian Administrative Agent or its counsel may reasonably request.
ARTICLE VI
REPRESENTATIONS AND WARRANTIES
In order to induce the Lenders and the Canadian Administrative
Agent to enter into this Agreement and to make Loans hereunder, the Borrower
represents and warrants unto the Canadian Administrative Agent and each Lender
as set forth in this ARTICLE VI, except as otherwise indicated on the Disclosure
Schedule:
SECTION 6.1 ORGANIZATION, ETC. The Borrower and each of its
Subsidiaries is a corporation or limited liability company validly incorporated
or organized and existing and in good standing under the laws of the province of
its incorporation or formation, is duly qualified to do business and is in good
standing as a foreign corporation or limited liability company in each
jurisdiction where the nature of its business requires such qualification, and
has full power and authority and holds all requisite governmental licenses,
permits and other approvals to enter into and perform its Obligations under this
Agreement, the Notes and each other Loan Document to which it is a party and to
own and hold under lease its property and to conduct its business substantially
in accordance with the first recital.
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SECTION 6.2 DUE AUTHORIZATION, NON-CONTRAVENTION, ETC. The execution,
delivery and performance by the Borrower of this Agreement, the Notes and each
other Loan Document executed or to be executed by it, and the execution,
delivery and performance by each other Obligor of each Loan Document executed or
to be executed by it, are within the Borrower's and each such Obligor's
corporate powers, have been duly authorized by all necessary corporate action,
and do not (a) contravene the Borrower's or any such Obligor's Organic
Documents; (b) contravene any contractual restriction, law or governmental
regulation or court decree or order binding on or affecting the Borrower or any
such Obligor; or (c) result in, or require the creation or imposition of, any
Lien on any of any Obligor's properties.
SECTION 6.3 GOVERNMENT APPROVAL, REGULATION, ETC. No authorization or
approval or other action by, and no notice to or filing with, any governmental
authority or regulatory body or other Person is required for the due execution,
delivery or performance by the Borrower of this Agreement, the Notes or any
other Loan Document to which it is a party, except for the filings of mortgages
and lien notices in connection with the granting of security interests pursuant
to the Collateral Documents. The Borrower and its Subsidiaries possess all
authorizations, approvals, permits and licenses necessary to operate their
respective businesses as currently operated and as anticipated to be operated.
Neither the Borrower nor any of its Subsidiaries is an "investment company"
within the meaning of the Investment Company Act of 1940, as amended, or a
"holding company," or a "subsidiary company" of a "holding company," or an
"affiliate" of a "holding company" or of a "subsidiary company" of a "holding
company," within the meaning of the Public Utility Holding Company Act of 1935,
as amended.
SECTION 6.4 VALIDITY, ETC. This Agreement constitutes, and the Notes
and each other Loan Document executed by the Borrower will, on the due execution
and delivery thereof, constitute, the legal, valid and binding obligations of
the Borrower enforceable in accordance with their respective terms; and each
Loan Document executed pursuant hereto by each other Obligor will, on the due
execution and delivery thereof by such Obligor, be the legal, valid and binding
obligation of such Obligor enforceable in accordance with its terms.
SECTION 6.5 FINANCIAL INFORMATION. The consolidated balance sheet of
the Parent and its Subsidiaries as at December 31, 2000 and June 30, 2001, and
the related consolidated statements of earnings and cash flow of the Parent and
its Subsidiaries, copies of which have been furnished to the Canadian
Administrative Agent and each Lender, have been prepared in accordance with GAAP
consistently applied, and present fairly the consolidated financial condition of
the corporations covered thereby as at the dates thereof and the results of
their operations for the periods then ended, subject, in the case of the June
30, 2001 statements, to normal year-end audit adjustments and the omission of
certain footnote disclosures. The Parent and each of its Subsidiaries are in
compliance with all of their existing financial obligations.
SECTION 6.6 NO MATERIAL ADVERSE CHANGE. Since December 31, 2000, there
has not been any Material Adverse Effect.
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SECTION 6.7 LITIGATION, LABOR CONTROVERSIES, ETC. As of the Effective
Date, except as disclosed in SCHEDULE I, there is no pending or, to the
knowledge of the Borrower, threatened litigation, action, proceeding, or labor
controversy affecting the Borrower or any of its Subsidiaries, or any of their
respective properties, businesses, assets or revenues, which could reasonably be
expected to materially adversely affect the financial condition, operations,
assets, business, properties or prospects of the Borrower or any Subsidiary or
which purports to affect the legality, validity or enforceability of this
Agreement, the Notes or any other Loan Document.
SECTION 6.8 SUBSIDIARIES. The Borrower has no Subsidiaries, except
those Subsidiaries (a) which are identified in ITEM 6.8 ("Existing
Subsidiaries") of the Disclosure Schedule; or (b) which are permitted to have
been acquired in accordance with SECTION 7.2.5 or 7.2.8. Each Subsidiary has
executed a Guaranty.
SECTION 6.9 OWNERSHIP OF PROPERTIES. The Borrower and each of its
Subsidiaries owns good and defensible title to all of its properties and assets,
real and personal, tangible and intangible, of any nature whatsoever (including
patents, trademarks, trade names, service marks and copyrights), free and clear
of all Liens, charges or claims (including infringement claims with respect to
patents, trademarks, copyrights and the like) except as permitted pursuant to
SECTION 7.2.3.
SECTION 6.10 TAXES. The Borrower and each of its Subsidiaries has filed
all tax returns and reports required by law to have been filed by it and has
paid all taxes and governmental charges thereby shown to be owing, except any
such taxes or charges which are being diligently contested in good faith by
appropriate proceedings and for which adequate reserves in accordance with GAAP
shall have been set aside on its books.
SECTION 6.11 [INTENTIONALLY LEFT BLANK]
SECTION 6.12 COMPLIANCE WITH LAW. Neither the Borrower nor any of its
Subsidiaries (a) is in violation of any law, statute, ordinance, decree,
requirement, order, judgment, rule, regulation (or any interpretation of the
foregoing) of, or the terms of any license or permit issued by, any governmental
authority; or (b) has failed to obtain any license, permit, franchise or other
governmental authorization necessary to ownership of any of their respective
properties or the conduct of their respective business; which violation or
failure could reasonably be expected to have a Material Adverse Effect.
SECTION 6.13 CLAIMS AND LIABILITIES. Neither the Borrower nor any of
its Subsidiaries has accrued any liabilities under gas purchase contracts for
gas not taken, but for which it is liable to pay if not made up and which, if
not paid, would have a Material Adverse Effect. No claims exist against the
Borrower or its Subsidiaries for gas imbalances which claims if adversely
determined would have a Material Adverse Effect. No purchaser of product
supplied by the Borrower or any of its Subsidiaries has any claim against the
Borrower or any of its Subsidiaries for product paid for, but for which delivery
was not taken as and when paid for, which claim if adversely determined would
have a Material Adverse Effect.
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SECTION 6.14 NO PROHIBITION ON PERFECTION OF COLLATERAL DOCUMENTS. None
of the terms or provisions of any indenture, mortgage, agreement or other
instrument to which the Borrower or any of its Subsidiaries is a party or by
which the Borrower or any of its Subsidiaries or the property of the Borrower or
any of its Subsidiaries is bound (other than documentation governing Permitted
Liens described in CLAUSES (a), (c), (q) and (r)) prohibit the filing or
recordation of any of the Loan Documents or any other action which is necessary
or appropriate in connection with the perfection or maintenance of the Liens on
material assets evidenced and created by any of the Loan Documents.
Notwithstanding the foregoing, documents governing a Capitalized Lease Liability
or a purchase money Lien permitted by SECTION 7.2.3(q) and (r) may prohibit
other Liens on the asset encumbered by such Lien.
SECTION 6.15 SOLVENCY. The Borrower is, and the Borrower and its
Subsidiaries on a consolidated basis are, solvent (as such term is used in
applicable bankruptcy, liquidation, receivership, insolvency and similar laws).
SECTION 6.16 ENVIRONMENTAL WARRANTIES. In the ordinary course of its
business, the Borrower conducts an ongoing review of the effect of Environmental
Laws on the business, operations and properties of the Borrower and its
Subsidiaries, in the course of which it identifies and evaluates associated
liabilities and costs (including any capital or operating expenditures required
for clean-up or closure of properties presently owned or operated, any capital
or operating expenditures required to achieve or maintain compliance with
environmental protection standards imposed by law or as a condition of any
license, permit or contract, any related constraints on operating activities,
including any periodic or permanent shutdown of any facility or reduction in the
level of or change in the nature of operations conducted thereat and any actual
or potential liabilities to third parties, including employees, and any related
costs and expenses). On the basis of this review, the Borrower has reasonably
concluded that, except as set forth in SCHEDULE I hereto, to the best of its
knowledge after due inquiry:
(a) all facilities and property (including underlying
groundwater) owned, leased or operated by the Borrower or any of its
Subsidiaries are owned, leased or operated by the Borrower and its Subsidiaries
in material compliance with all Environmental Laws;
(b) there are no pending or threatened, and to Borrower's
knowledge, there have been no past, continuing (i) claims, complaints, notices
or inquiries to, or requests for information received by, the Borrower or any of
its Subsidiaries with respect to any alleged violation of any Environmental Law,
that, singly or in the aggregate, have or may reasonably be expected to have a
Material Adverse Effect, or (ii) claims, complaints, notices or inquiries to, or
requests for information received by, the Borrower or any of its Subsidiaries
regarding potential liability under any Environmental Law or under any common
law theories relating to operations or the condition of any facilities or
property (including underlying groundwater) owned, leased or operated by the
Borrower and its Subsidiaries that, singly or in the aggregate, have, or may
reasonably be expected to have, a Material Adverse Effect;
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(c) there have been no releases of Hazardous Materials
at, on or under any property now or previously owned or leased by the Borrower
or any of its Subsidiaries that, singly or in the aggregate, have, or may
reasonably be expected to have, a Material Adverse Effect;
(d) the Borrower and its Subsidiaries have been issued
and are in material compliance with all permits, certificates, approvals,
licenses and other authorizations relating to environmental matters and
necessary or desirable for their businesses;
(e) there are no underground storage tanks, active or
abandoned, including petroleum storage tanks, on or under any property now or
previously owned, leased or operated by the Borrower or any of its Subsidiaries
that, singly or in the aggregate, have, or may reasonably be expected to have, a
Material Adverse Effect;
(f) there are no polychlorinated biphenyls, radioactive
materials or friable asbestos present at any property now or previously owned or
leased by the Borrower or any of its Subsidiaries that, singly or in the
aggregate, have, or may reasonably be expected to have, a Material Adverse
Effect; and
(g) no condition exists at, on or under any property now
or previously owned or leased by the Borrower or any of its Subsidiaries which,
with the passage of time, or the giving of notice or both, would give rise to
material liability under any Environmental Law that, singly or in the aggregate
have, or may reasonably be expected to have, a Material Adverse Effect.
SECTION 6.17 REGULATIONS T, U AND X. The Borrower is not engaged and
will not engage, principally or as one of its important activities, in the
business of purchasing or carrying margin stock, and no proceeds of any Loans
will be used for a purpose which violates, or would be inconsistent with, F.R.S.
Board Regulation T, U or X. Terms for which meanings are provided in F.R.S.
Board Regulation T, U or X or any regulations substituted therefor, as from time
to time in effect, are used in this Section with such meanings. As of the
Effective Date, the Borrower does not own any Margin Stock.
SECTION 6.18 ACCURACY OF INFORMATION. All material factual information
heretofore or contemporaneously furnished by or on behalf of the Borrower in
writing to the Canadian Administrative Agent or any Lender for purposes of or in
connection with this Agreement or any transaction contemplated hereby is, and
all other such factual information hereafter furnished by or on behalf of the
Borrower to the Canadian Administrative Agent or any Lender will be, true and
accurate in all material respects on the date as of which such information is
dated or certified, and except as amended or superseded by any such information
subsequently provided prior to the date of execution and delivery of this
Agreement, as of the date of execution and delivery of this Agreement by the
Canadian Administrative Agent and such Lender, and such information is not, or
shall not be, as the case may be, incomplete by omitting to state any material
fact necessary to make such information not misleading. All estimates and
projections (including the Projections as defined in
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the U.S. Credit Agreement) delivered to the Canadian Administrative Agent or any
Lender were based upon information that was available at the time such estimates
or projections were made and believed to be correct and upon assumptions
believed to be reasonable; however the Borrower does not warrant that such
estimates and projections will ultimately prove to have been accurate.
SECTION 6.19 DEFAULT. No Default or Event of Default has occurred and
is continuing.
SECTION 6.20 [INTENTIONALLY LEFT BLANK]
SECTION 6.21 OIL AND GAS RESERVES. The Borrower and each Subsidiary is
and will hereafter be, in all material respects, the owner of the Hydrocarbon
Interests that it purports to own from time to time in and under its Oil and Gas
Properties, together with the right to produce the same. The Hydrocarbon
Interests are not subject to any Lien other than Permitted Liens. All Oil and
Gas have been and will hereafter be produced, sold and delivered in accordance
in all material respects with all applicable laws and regulations; each of the
Borrower and its Subsidiaries has complied in all material respects and will
hereafter use commercially reasonable efforts to comply with all material terms
of each oil, gas and mineral lease comprising its Hydrocarbon Interests; and all
such oil, gas and mineral leases have been and will hereafter be maintained in
full force and effect; PROVIDED, HOWEVER, that nothing in this SECTION 6.21
shall prevent the Borrower or its Subsidiaries from (a) selling or otherwise
disposing of assets as permitted by SECTION 7.2.9 or (b) abandoning any well or
forfeiting, surrendering, releasing or defaulting under any lease in the
ordinary course of business and which, in the opinion of the Borrower or its
Subsidiaries, is in its best interest, PROVIDED, THAT the Borrower and its
Subsidiaries is and will hereafter be in compliance with all obligations
hereunder. To the best of the knowledge of the Borrower all agreements pursuant
to which Borrower and its Subsidiaries own their Hydrocarbon Interests are and
will hereafter be enforceable in all material respects in accordance with their
terms except as such may be modified by applicable bankruptcy law or an order of
a court in equity.
SECTION 6.22 INITIAL RESERVE REPORT; TITLE OPINION. (a) The Borrower
has heretofore delivered to the Canadian Administrative Agent a true and
complete copy of the Initial Reserve Report covering certain of the Borrower's
Oil and Gas Properties located in Canada relating to an evaluation of the Oil
and Gas attributable to certain of the Oil and Gas Properties described therein.
To the best knowledge of the Borrower, (a) the assumptions stated or used in the
preparation of the Initial Reserve Report are reasonable, (b) all information
furnished by the Borrower to the Independent Engineer for use in the preparation
of the Initial Reserve Report was accurate in all material respects and (c)
there has been no material adverse change in the amount of the estimated Oil and
Gas shown in the Initial Reserve Report since the date thereof, except for
changes which have occurred as a result of production in the ordinary course of
business.
(b) The Borrower has heretofore delivered a title opinion
to the Administrative Agent describing the status of title to certain of the
Borrower's Oil and Gas Properties, together with a report of Watford Energy Ltd.
(a predecessor of the Borrower) dated July 31, 2001, addressed to
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the Parent and entitled "Watford Chevron Farmin Summaries, Princess and Bantry
Areas, Province of Alberta" (the "Farmin Report"). Such title opinion, together
with the Farmin Report, describe in all material respects the status of title to
at least 75% of the value of the Borrower's and its Subsidiary's Oil and Gas
Properties included in the Initial Reserve Report.
ARTICLE VII
COVENANTS
SECTION 7.1 AFFIRMATIVE COVENANTS. Each of the Borrower and Parent (by
its execution of a Guaranty) agrees with the Canadian Administrative Agent and
each Lender that, until all Commitments have terminated and all Obligations have
been paid and performed in full, the Borrower will perform the obligations set
forth in this SECTION 7.1.
SECTION 7.1.1 FINANCIAL INFORMATION, REPORTS, NOTICES, ETC. The
Borrower or the Parent will furnish, or will cause to be furnished, to the
Canadian Administrative Agent sufficient copies of the following financial
statements, reports, notices and information to provide one to each Lender:
(a) as soon as available and in any event within (i) (A)
30 days after the end of each month (other than December), and (B) within 45
days after the end of each December, a consolidated balance sheet of the Parent
and its Subsidiaries as of the end of such month and consolidated statements of
earnings and cash flow of the Parent and its Subsidiaries for such month and for
the period commencing at the end of the previous Fiscal Year and ending with the
end of such month, certified by the chief financial officer of the Parent (ii)
within 45 days after the end of each of the first three quarters of each year,
the Parent's form 10-Q for such quarter, in each case together with a report, in
form and substance satisfactory to the Canadian Administrative Agent and the
Required Lenders, reconciling the Parent's and its Subsidiaries' actual
performance to the most recent budgets and forecasts delivered pursuant to
SECTION 5.1.9 or SECTION 7.1.1(h)(i) or (ii), as the case may be, certified by
the chief financial officer of the Parent and containing an explanation in
reasonable detail for any significant negative variances;
(b) as soon as available and in any event within 90 days
after the end of each Fiscal Year of the Parent, a copy of the annual audit
report for such Fiscal Year for the Parent and its Subsidiaries, including
therein consolidated balance sheets of the Parent and its Subsidiaries as of the
end of such Fiscal Year and consolidated statements of earnings and cash flow of
the Parent and its Subsidiaries for such Fiscal Year, certified (without any
"going concern" or other qualification) in a manner acceptable to the Canadian
Administrative Agent and the Required Lenders by PriceWaterhouseCoopers LLP or
other independent public accountants acceptable to the Canadian Administrative
Agent and the Required Lenders, together with certificates from such accountants
containing (x) a report on management's assertion about compliance (together
with management's computation of, and showing compliance) with each of the
financial ratios and restrictions contained in SECTION 7.2.4 and (y) to the
effect that, in making the examination necessary for the signing of such annual
report by such accountants, they have not become aware of any Default or Event
of
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Default that has occurred and is continuing, or, if they have become aware of
such Default or Event of Default, describing such Default or Event of Default
and the steps, if any, being taken to cure it; timely delivery of the Parent's
Form 10-K pursuant to clause (f) below shall be deemed to satisfy this clause
(b);
(c) as soon as available and in any event within 45 days
after the end of each month, a certificate in the form of EXHIBIT F, executed by
the chief financial officer of the Parent and the Borrower, showing (in
reasonable detail and with appropriate calculations and computations in all
respects satisfactory to the Canadian Administrative Agent) compliance with the
financial covenants set forth in SECTION 7.2.4 and setting forth such
information as is required in such form;
(d) as soon as possible and in any event within three
Business Days after the Borrower obtains knowledge of the occurrence of each
Default, a statement of the chief financial officer of the Borrower setting
forth details of such Default and the action which the Borrower has taken and
proposes to take with respect thereto;
(e) as soon as possible and in any event within three (3)
Business Days after the Borrower obtains knowledge of any of the following if it
could reasonably be expected to result in a Material Adverse Effect if adversely
determined: (i) the occurrence of any adverse development with respect to any
litigation, action, proceeding, or labor controversy described in SECTION 6.7,
(ii) the commencement of any labor controversy, litigation, action, proceeding
of the type described in SECTION 6.7, notice thereof and copies of all
documentation relating thereto, (iii) any adverse development involving, or
material default by any party under, or breach by any party of any material
contract or agreement to which the Borrower or any Subsidiary is a party or by
which it is bound, or (iv) any dispute, litigation, investigation, proceeding or
suspension between the Borrower or any Subsidiary and any Governmental
Authority;
(f) promptly after the sending or filing thereof, copies
of all reports which the Parent or the Borrower sends to any of its security
holders, and all reports and registration statements (without exhibits) which
the Borrower, Parent or any of their Subsidiaries files with the Securities and
Exchange Commission or any national securities exchange;
(g) [INTENTIONALLY LEFT BLANK]
(h) (i) annually, on or before March 31 of each year and
(ii) promptly upon request of the Canadian Administrative Agent or the Required
Lenders (which requests may not be more frequent than once each quarter), a
budget for the year commencing the preceding January 1 and a five-year forecast
for the Parent and its Subsidiaries in form and substance satisfactory to the
Canadian Administrative Agent and the Required Lenders and consistent with the
budget and projections delivered pursuant to SECTION 5.1.9 and based upon
information that is then currently available and believed to be correct and upon
assumptions believed to be reasonable;
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(i) the Parent shall deliver to the Canadian
Administrative Agent, promptly upon sending or receipt, copies of any and all
management letters and correspondence relating to management letters, sent or
received by the Parent or any of its Subsidiaries to or from
PriceWaterhouseCoopers LLP or other independent public accountants acceptable to
the Canadian Administrative Agent and the Required Lenders;
(j) as soon as available, but not later than 60 days
after the close of each of the first three Fiscal Quarters of each year,
beginning with the Fiscal Quarter ending September 30, 2001, and not later than
90 days after the close of each Fiscal Quarter ending on December 31, a
Quarterly Status Report as of the last day of the immediately preceding quarter;
(k) on or before April 1, effective as of January 1, of
each year during the term of this Agreement, a Reserve Report prepared by an
independent petroleum engineer acceptable to the Required Lenders (the
"INDEPENDENT ENGINEER");
(l) promptly upon the request of the Canadian
Administrative Agent, such copies of all geological, engineering and related
data contained in the Borrower's files or readily accessible to the Borrower
relating to its and its Subsidiaries' Oil and Gas Properties as may reasonably
be requested; and
(m) such other information respecting the condition or
operations, financial or otherwise, or properties or assets of the Borrower,
Parent or any of their Subsidiaries as any Lender through the Canadian
Administrative Agent may from time to time reasonably request in writing.
SECTION 7.1.2 COMPLIANCE WITH LAWS, ETC. The Borrower will, and will
cause each of its Subsidiaries to, comply with all applicable laws, rules,
regulations and orders (including Environmental Laws), such compliance to
include, without limitation, (a) the maintenance and preservation of its
corporate, partnership or limited liability company existence and qualification
as a foreign corporation, partnership or limited liability company; and (b) the
payment, before the same become delinquent, of all taxes, assessments and
governmental charges imposed upon it or upon its property except to the extent
being diligently contested in good faith by appropriate proceedings and for
which adequate reserves in accordance with GAAP shall have been set aside on its
books, except where the failure to so comply with the terms of this Section
7.1.2 shall not reasonably be expected to have a Material Adverse Effect.
SECTION 7.1.3 MAINTENANCE OF PROPERTIES. The Borrower will, and will
cause each of its Subsidiaries to, maintain, preserve, protect and keep its
properties in good repair, working order and condition in all material respects,
and make necessary and proper repairs, renewals and replacements so that its
business carried on in connection therewith may be properly conducted at all
times unless the Borrower determines in good faith that the continued
maintenance of any of its properties is no longer economical.
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SECTION 7.1.4 USE OF PROCEEDS. The proceeds of the Loans shall be used
(a) to repay all or a portion of the Intercompany Loan and (b) for general
corporate and working capital purposes of the Borrower and its Subsidiaries.
SECTION 7.1.5 INSURANCE. The Borrower will, and will cause each of its
Subsidiaries to, maintain or cause to be maintained with responsible insurance
companies insurance with respect to its properties and business (including
business interruption insurance) against such casualties and contingencies and
of such types and in such amounts as is customary in the case of similar
businesses and which is satisfactory to the Canadian Administrative Agent and
the Required Lenders and will (a) furnish to the Canadian Administrative Agent
on each anniversary of the Effective Date a certificate or certificates of
insurance from Borrower's insurance companies evidencing the existence of all
insurance required to be maintained by the Borrower by this Agreement and the
other Loan Documents and that Canadian Administrative Agent is listed as
additional insured and sole loss payee and (b) upon request of the Canadian
Administrative Agent, furnish to each Lender at reasonable intervals a
certificate of an Authorized Officer of the Borrower setting forth the nature
and extent of all insurance maintained by the Borrower and its Subsidiaries in
accordance with this Section.
Except as the Canadian Administrative Agent may otherwise
consent to in writing, Borrower will, and will cause each of its Subsidiaries
to, forthwith upon receipt, transmit and deliver to the Canadian Administrative
Agent, in the form received, all cash, checks, drafts, chattel paper and other
instruments or writings for the payment of money (properly endorsed, where
required, so that such items may be collected by the Canadian Administrative
Agent) which may be received by the Borrower at any time in full or partial
payment of amounts due under any insurance policy. Except as the Canadian
Administrative Agent may otherwise consent in writing, any such items which may
be received by the Borrower will not be commingled with any other of its funds
or property, but will be held separate and apart from its own funds or property
and upon express trust for the Canadian Administrative Agent until delivery is
made to the Canadian Administrative Agent. Borrower will comply with the terms
and conditions of any consent given by the Canadian Administrative Agent
pursuant to the provisions of this paragraph.
All items or amounts which are delivered by the Borrower or by
any insurance company to the Canadian Administrative Agent on account of partial
or full payment of amounts due under any insurance policy shall be deposited to
the credit of a deposit account (herein called the "INSURANCE DEPOSIT ACCOUNT")
of the Borrower with the Canadian Administrative Agent, as security for payment
of the Obligations. Borrower shall have no right to withdraw any funds deposited
in the Insurance Deposit Account. Subject to SECTION 3.1(c), the Canadian
Administrative Agent will apply all or any of the then balance in the Insurance
Deposit Account towards payment of the Obligations, in such order of application
as the Canadian Administrative Agent may determine. The Canadian Administrative
Agent may, from time to time, in its reasonable discretion and with the consent
of the Required Lenders, release all or any of such balance representing
collected funds to the Borrower. The Canadian Administrative Agent is authorized
to endorse, in the name of the Borrower, any item,
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howsoever received by the Canadian Administrative Agent, representing any
payment under any insurance policy.
SECTION 7.1.6 BOOKS AND RECORDS. The Borrower will, and will cause each
of its Subsidiaries to, keep books and records which accurately reflect all of
its business affairs and transactions and permit the Canadian Administrative
Agent and each Lender or any of their respective representatives, at reasonable
times and intervals, to visit all of its offices and properties, to discuss its
financial matters with its officers and independent public accountant (and the
Borrower hereby authorizes such independent public accountant to discuss the
Borrower's financial matters with each Lender or its representatives with a
representative of the Borrower present) and to examine (and, at the expense of
the Borrower, photocopy extracts from) any of its books or other corporate
records. The Borrower shall pay any fees of such independent public accountant
incurred in connection with the Canadian Administrative Agent's or any Lender's
exercise of its rights pursuant to this Section.
SECTION 7.1.7 ENVIRONMENTAL COVENANT. The Borrower will, and will cause
each of its Subsidiaries to, (a) use and operate all of its facilities and
properties in compliance with all Environmental Laws, keep all necessary
permits, approvals, certificates, licenses and other authorizations relating to
environmental matters in effect and remain in compliance therewith, and handle
all Hazardous Materials in compliance with all applicable Environmental Laws,
except where the failure to so comply shall not reasonably be expected to have a
Material Adverse Effect; and (b) provide such information and certifications
which the Canadian Administrative Agent may reasonably request from time to time
to evidence compliance with this SECTION 7.1.7; PROVIDED, THAT neither the
Canadian Administrative Agent nor any Lender shall have any obligation to make
any inquiries pursuant to this SECTION 7.1.7.
SECTION 7.1.8 FURTHER ASSURANCES; ADDITIONAL COLLATERAL; RECORDING OF
LIENS. (a) The Borrower shall, the Parent shall, and the Parent shall cause each
Subsidiary of Parent (other than Borrower) to, from time to time, become an
Obligor with respect to, and jointly and severally liable with all other
Obligors for, all the Obligations under this Agreement and the Notes and the
other Loan Documents by promptly executing and delivering to the Lenders a
Guaranty substantially in the form of EXHIBIT G-1 or G-2 hereto, with
appropriate insertions, and by causing such Subsidiary's, as the case may be,
capital stock, partnership, joint venture or membership interest to be pledged
pursuant to a pledge agreement in form satisfactory to the Canadian
Administrative Agent.
(b) The Borrower shall, the Parent shall and the Parent
shall cause each Subsidiary of the Parent to, take such actions and to execute
and deliver such documents and instruments as the Canadian Administrative Agent
shall require to ensure that the Canadian Administrative Agent or the
Administrative Agent on behalf of the Lenders shall, at all times, have received
currently effective duly executed Loan Documents encumbering substantially all
of the Borrower's, the Parent's and each of the Parent's Subsidiaries' assets,
including (i) 100% of the stock or other equity interest in each such
Subsidiary, (ii) 75% of the total value of all of the
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Borrower's, Parent's and their Subsidiaries' Oil and Gas Properties evaluated in
the most recent Reserve Report, and (iii) all of the Borrower's, Parent's and
their Subsidiaries' other material assets and properties, both tangible and
intangible, both personal and real, other than assets encumbered by Liens
permitted by SECTION 7.2.3(q), (r) and (s) hereunder and SECTION 7.2.3(q), (r)
and (s) of the U.S. Credit Agreement.
(c) (i) In connection with the actions required pursuant
to the foregoing SUBSECTIONS (a) and (b), the Parent shall, and shall cause its
Subsidiaries to execute and deliver such stock certificates, blank stock powers,
evidence of corporate authorization, opinions of counsel, current valuations,
evidence of title, title opinions, title insurance and other documents, and
shall use commercially reasonable efforts to obtain landlord and mortgagee
waivers and third party consents, as shall be requested by the Canadian
Administrative Agent, in each case in form and substance satisfactory to the
Canadian Administrative Agent.
(ii) On or before the delivery of each Reserve
Report required by SECTION 7.1.1(k), the Borrower shall deliver to the Canadian
Administrative Agent such title information as the Canadian Administrative Agent
may require setting forth the status of title acceptable to the Canadian
Administrative Agent covering enough of the Oil and Gas Properties included in
such Reserve Report so that the Canadian Administrative Agent shall have
received, together with the title information previously delivered to the
Canadian Administrative Agent, satisfactory title information on at least 75% of
the value of the Borrower's and its Subsidiaries' Oil and Gas Properties
included in such Reserve Reports.
(d) The liens required by this SECTION 7.1.8 shall be
first priority perfected liens in favor of the Canadian Administrative Agent,
subject to no other liens except Permitted Liens. If the Canadian Administrative
Agent shall determine that, as of any date, the Borrower shall have failed to
comply with this SECTION 7.1.8, the Canadian Administrative Agent may (and at
the direction of the Required Lenders, shall) notify the Borrower in writing of
such failure and, within 30 days from and after receipt of such written notice
by the Borrower, the Borrower shall, or the Parent shall cause any of its
Subsidiaries to, execute and deliver to the Canadian Administrative Agent
supplemental or additional Loan Documents, in form and substance satisfactory to
the Canadian Administrative Agent and its counsel, securing payment of the Notes
and the other Obligations and covering additional assets and properties not then
encumbered by any Loan Documents (together with such current valuations,
engineering reports, appraisals, and title opinions or insurance applicable to
the additional assets and properties collaterally assigned, as may be requested
by the Canadian Administrative Agent, each of which shall be in form and
substance satisfactory to the Canadian Administrative Agent) such that the
Canadian Administrative Agent shall have received currently effective duly
executed and perfected Collateral Documents encumbering substantially all of the
material assets and properties of the Parent and its Subsidiaries as required by
SECTION 7.1.8(b).
(e) Without limiting any of the foregoing provisions of
this SECTION 7.1.8, at any time the Canadian Administrative Agent may, or upon
the direction of the Required Lenders shall, register such security notices,
caveats, liens, and charges and file such Mortgages and other
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instruments as the Canadian Administrative Agent may deem necessary or
appropriate in connection with the Collateral, including Oil and Gas Properties.
SECTION 7.1.9 COMPLIANCE WITH HEDGING POLICY; HEDGING AGREEMENTS. (a)
Attached hereto as EXHIBIT K is a copy of the Parent's hedging policy (the
"HEDGING POLICY"). Borrower shall at all times comply in all material respects
with, and perform any and all obligations and actions set forth in, the terms
and provisions of the Hedging Policy. No changes shall be made to the Hedging
Policy except in compliance with SECTION 7.2.1.
(b) The Borrower shall maintain the hedged position
required by SECTION 5.1.15 during the period and in accordance with the terms
specified herein.
SECTION 7.1.10 HEDGING AGREEMENTS. The Parent shall (a) as soon as
available and in any event within (i) 30 days after the end of each month (other
than December), and (ii) within 45 days after the end of each December, deliver
to the Canadian Administrative Agent a summary of all existing Hedging Agreement
entered into by Parent or any of its Subsidiaries, including, without
limitation, the amount of the Hedging Obligation, the quantity of hedged volumes
and the hedged price relating to each such Hedging Agreement, and the
Counterparty for each such Hedging Agreement, and (b) at the request of the
Canadian Administrative Agent, provide the Canadian Administrative Agent with a
copy of such Hedging Agreement, any related confirmations and/or any similar
documentation for each such Hedging Agreement.
SECTION 7.1.11 PERFORMANCE OF OBLIGATIONS. The Borrower shall (and
shall cause its Subsidiaries to, comply in all material respects with all of its
(and their) obligations under all material contracts including, but not limited
to, contracts relating to the properties of the Borrower or its Subsidiaries or
by which the Borrower (or such Subsidiaries, as applicable) are bound.
SECTION 7.1.12 PAYMENT OF TAXES AND CLAIMS. The Borrower will and will
cause each of its Subsidiaries to file all tax returns required to be filed in
any jurisdiction and to pay and discharge all taxes shown to be due and payable
on such returns and all other taxes, assessments, governmental charges, or
levies imposed on them or any of their properties, assets, income or franchises,
to the extent such taxes and assessments have become due and payable and before
they have become delinquent and all claims for which sums have become due and
payable that have or might become a Lien on properties or assets of the Borrower
or any Subsidiary, PROVIDED, THAT neither the Borrower nor any Subsidiary need
pay any such tax or assessment or claims if (a) the amount, applicability or
validity thereof is contested by the Borrower or such Subsidiary on a timely
basis in good faith and in appropriate proceedings, and the Parent or the
Borrower or a Subsidiary has established adequate reserves therefor in
accordance with GAAP on the books of the Parent, Borrower or such Subsidiary or
(b) the nonpayment of all such taxes and assessments in the aggregate could not
reasonably be expected to have a Material Adverse Effect.
SECTION 7.2 NEGATIVE COVENANTS. The Borrower agrees with the Canadian
Administrative Agent and each Lender that, until all Commitments have
terminated, all Obligations have been paid
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and performed in full, and no Letters of Credit remain outstanding, the Borrower
will perform the obligations set forth in this SECTION 7.2.
SECTION 7.2.1 BUSINESS ACTIVITIES. The Borrower will not, and will not
permit any of its Subsidiaries to, engage in any business activity, except those
described in the FIRST RECITAL and such activities as may be incidental or
related thereto; PROVIDED, THAT prior to making any material change after the
date hereof in the Borrower's natural gas, natural gas liquids and crude oil
marketing business or Hedging Policy (including any net open position), the
Borrower will give ten (10) Business Days advance notice to Canadian
Administrative Agent and the Lenders.
SECTION 7.2.2 INDEBTEDNESS. The Borrower will not, and will not permit
any of its Subsidiaries to, create, incur, assume or suffer to exist or
otherwise become or be liable in respect of any Indebtedness, other than,
without duplication, the following: (a) Indebtedness in respect of the Loans and
other Obligations; (b) [INTENTIONALLY LEFT BLANK]; (c) unsecured Indebtedness
incurred in the ordinary course of business consisting of open accounts extended
by suppliers and customers on normal trade terms in connection with purchases or
sales of goods and services, but excluding Indebtedness incurred through the
borrowing of money or Contingent Liabilities; (d) (i) at any time that the U.S.
Credit Agreement is not in effect, other Indebtedness of the Borrower and its
Subsidiaries in an aggregate amount not to exceed the Canadian Dollar Equivalent
of U.S. $2,700,000, and (ii) at any time that the U.S. Credit Agreement is in
effect, Indebtedness in an aggregate principal amount not greater than the
Canadian Ratio times the Canadian Dollar Equivalent of U.S. $10,000,000; (e)
Indebtedness owed by (i) a Subsidiary to the Borrower, (ii) the Borrower or a
Subsidiary to a Wholly-Owned Subsidiary, and (iii) the Borrower or a Subsidiary
to the Parent, PROVIDED THAT in each such case under this CLAUSE (e), such
Indebtedness is evidenced by a promissory note which has been pledged to secure
the Obligations and is in the possession of the Administrative Agent or the
Canadian Administrative Agent, and such Indebtedness is subordinated to the
Obligations upon terms and conditions satisfactory to the Canadian
Administrative Agent; (f) Indebtedness resulting from any Hedging Obligations;
(g) [INTENTIONALLY LEFT BLANK]; and (h) payments pursuant to the Incentive
Payments Agreement; PROVIDED, HOWEVER, notwithstanding the foregoing, that the
Borrower will not, and will not permit any of its Subsidiaries to, create,
incur, assume or otherwise become or be liable in respect of any additional
Indebtedness otherwise permitted by CLAUSES (d) OR (h) if, after giving effect
to the incurrence thereof, any Default shall have occurred and be continuing.
SECTION 7.2.3 LIENS. The Borrower will not, and will not permit any of
its Subsidiaries to, create, incur, assume or suffer to exist any Lien upon any
of its property, revenues or assets, whether now owned or hereafter acquired,
except the following ("PERMITTED LIENS"):
(a) Liens in existence on the date hereof listed on the
Disclosure Schedule, PROVIDED, THAT no such Lien shall be extended to cover any
additional property after the date of this Agreement and that the amount of
Indebtedness secured thereby is not increased;
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(b) Liens securing payment of the Obligations, granted
pursuant to any Loan Document;
(c) Liens securing payment of the "Obligations" under the
U.S. Credit Agreement, subject to the Intercreditor Agreement;
(d) Liens in favor of a Lender or an Affiliate of a
Lender on assets of any Borrower or any of its Subsidiaries securing Lender
Hedging Agreements to which a Borrower or any of its Subsidiaries is a party,
which Liens shall be subject to the Intercreditor Agreement;
(e) Liens for taxes, assessments or other governmental
charges or levies not at the time delinquent or thereafter payable without
penalty or being diligently contested in good faith by appropriate proceedings
and for which adequate reserves in accordance with GAAP shall have been set
aside on its books;
(f) Liens of carriers, warehousemen, mechanics,
materialmen, landlords and other similar statutory or equitable Liens incurred
in the ordinary course of business for sums not overdue or being diligently
contested in good faith by appropriate proceedings and for which adequate
reserves in accordance with GAAP shall have been set aside on its books;
(g) Liens incurred in the ordinary course of business in
connection with workmen's compensation, unemployment insurance or other forms of
governmental insurance or benefits, or to secure performance of tenders,
statutory obligations, leases and contracts (other than for borrowed money)
entered into in the ordinary course of business or to secure obligations on
surety or appeal bonds, in each case as such Liens arise in the ordinary cause
of business and in each case PROVIDED, THAT the obligations secured thereby are
not at the time delinquent or thereafter payable without penalty or being
diligently contested in good faith by appropriate proceedings and for which
adequate reserves in accordance with GAAP shall have been set aside on its
books;
(h) judgment Liens which do not constitute an Event of
Default that are in existence less than 30 days after the entry thereof or with
respect to which execution has been stayed or the payment of which is covered in
full (subject to a customary deductible) by insurance maintained with
responsible insurance companies;
(i) hydrocarbon or natural gas sales contracts liens
reserved in customary oil and gas leases for bonus or rental payments,
royalties, overriding royalties and joint operating agreements, PROVIDED, THAT
such Liens secure claims which either are not delinquent or are being contested
in good faith by the Borrower or a Subsidiary by appropriate proceedings and for
which adequate reserves in accordance with GAAP shall have been set aside on its
books;
(j) covenants, restrictions, easements, servitudes,
permits, conditions, exceptions, reservations, minor rights, minor encumbrances,
minor irregularities in title or conventional rights of reassignment prior to
abandonment which do not materially interfere with the occupation, use and
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enjoyment by the Borrower or any of its Subsidiaries of its respective assets in
the ordinary course of business as presently conducted, or materially impair the
value thereof for the purpose of such business;
(k) Liens reserved in or exercisable under any lease or
sublease to which any Borrower or Subsidiary is a lessee which secure the
payment of rent or compliance with the terms of such lease or sublease;
PROVIDED, THAT the rent under such lease or sublease is not then overdue and the
Borrower or Subsidiary is in material compliance with the terms and conditions
thereof;
(l) Liens in favor of any Person (other than the Borrower
or any Affiliate of the Borrower) under any pooling, unit, development, farmout,
participation, overriding royalty, net profits interest, carried interest,
reversionary interest, operating agreement or similar agreement affecting the
property which is the subject of such agreement, PROVIDED, THAT (i) such
agreement is entered into in the ordinary course of business in accordance with
standard industry practice, (ii) such Liens have not become subject to
enforcement proceeding that have not been dismissed or stayed or (iii) the
obligations secured thereby are not overdue, or if overdue, are being contested
by the Borrower or Subsidiary diligently and in good faith by appropriate
proceedings and for which adequate reserves in accordance with GAAP shall have
been set aside on its books;
(m) Liens incurred or created in the ordinary course of
business and in accordance with customary oil and gas industry practice as
security in favor of a Person (other than the Borrower or any Affiliate of the
Borrower) conducting the development or operation of any Oil and Gas Properties
or to secure Borrower's or any Subsidiary's proportionate share of costs and
expenses of such development or operations, which amounts are not overdue, or if
overdue, are being contested by the Borrower or Subsidiary diligently and in
good faith by appropriate proceedings and for which adequate reserves in
accordance with GAAP shall have been set aside on its books;
(n) Liens on Oil and Gas or the proceeds of Oil and Gas
pursuant to a processing or transmission arrangement, with a Person other than
the Borrower or an Affiliate of the Borrower, entered into or assumed by the
Borrower or a Subsidiary in the ordinary course of its business, securing the
payment of its obligations in respect of the fees, costs and expenses
attributable to the processing or transmission (as the case may be) of any such
Oil and Gas under any agreement or arrangement; PROVIDED, THAT the obligations
secured thereby are not overdue, are being contested by the Borrower or
Subsidiary diligently and in good faith by appropriate proceedings; and for
which adequate reserves in accordance with GAAP shall have been set aside on its
books;
(o) any interest or title of a lessor under any lease
entered into by the Borrower or any Subsidiary in the ordinary course of its
business and covering only the assets so leased;
(p) Liens incurred in the ordinary course of business in
connection with margin requirements under Hedging Agreements, which, when
aggregated with Liens incurred by the Parent and its Subsidiaries (including the
Borrower) in connection with margin requirements under Hedging Agreements, do
not exceed in the aggregate U.S. $8,500,000 at any time outstanding;
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(q) Liens securing Capitalized Lease Obligations
PROVIDED, THAT such Capitalized Lease Obligations are permitted under SECTION
7.2.2(d);
(r) Purchase money Liens upon or in any property acquired
by Borrower or any of its Subsidiaries to secure the deferred portion of the
purchase price of such property or to secure Indebtedness incurred to finance
the acquisition of such property, PROVIDED, THAT (i) no such Lien shall be
extended to cover property other than the property being acquired, and (ii) the
Indebtedness thereby secured is permitted by SECTION 7.2.2(d); and
(s) any Lien existing on any asset (other than stock of a
Subsidiary) prior to acquisition thereof by the Borrower or a Subsidiary, and
not created in contemplation of such acquisition, PROVIDED, THAT (i) no such
Lien shall be extended to cover property other than the asset being acquired,
(ii) such Lien was not created in contemplation of or in connection with such
acquisition, (iii) the Indebtedness thereby secured is permitted by SECTION
7.2.2(d), and (iv) the fair market value of such asset shall at no time exceed
150% of the Indebtedness thereby secured.
SECTION 7.2.4 FINANCIAL COVENANTS. The Parent shall not permit:
(a) As of the end of any calendar month, the Parent's
Tangible Net Worth to be less than U.S. $45,400,000 PLUS 50% of Consolidated Net
Income of the Parent and its Subsidiaries, if positive, for the period from July
1, 2001 through such month-end date PLUS 75% of the aggregate increases in
shareholders' equity (determined in accordance with GAAP) of the Parent and its
Subsidiaries after Closing by reason of the issuance and sale of capital stock
of the Parent (including the conversion of any debt securities of the Parent
into capital stock).
(b) The Parent's Current Ratio to be less than 1:1 as of
the end of any calendar month.
(c) The Parent's Leverage Ratio to be greater than the
amounts set forth below as of the last day of each month ending during the
following periods:
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<Table>
<Caption>
As of the Last Date of
Maximum Leverage Ratio each Month Ending During
---------------------- the Period Set Forth Below
--------------------------
3.75 Effective Date through 12/31/01
3.50 1/31/02 through 3/31/02
3.25 4/30/02 through 6/30/02
3.00 7/31/02 and thereafter
</Table>
(d) The Parent's Fixed Charge Coverage Ratio to be less than
the amounts set forth below as of the last day of each month ending during the
following periods:
<Table>
<Caption>
As of the Last Date of
Minimum Fixed Charge each Month Ending During
Coverage Ratio the Period Set Forth Below
-------------- --------------------------
1.50 Effective Date through 3/31/02
1.75 4/30/02 through 3/31/03
2.00 4/30/03 through 3/31/04
2.25 4/30/04 and thereafter
</Table>
SECTION 7.2.5 INVESTMENTS. The Borrower will not, and will not permit
any of its Subsidiaries to, make, incur, assume or suffer to exist any
Investment in any other Person, except: (a) Investments existing on the
Effective Date and identified in ITEM 7.2.5(a) ("EXISTING INVESTMENTS") of the
Disclosure Schedule; (b) Cash Equivalent Investments; (c) without duplication,
Investments permitted as Indebtedness pursuant to SECTION 7.2.2; (d)
[INTENTIONALLY LEFT BLANK]; (e) in the ordinary course of business, Investments
by (i) the Borrower in any Subsidiary by way of contributions to capital, (ii)
any Subsidiary in any other Subsidiary by way of contributions to capital, and
(iii) subject to SECTION 7.2.2, (A) any Subsidiary in any Wholly-Owned
Subsidiary by way of loans or advances, and (B) the Borrower or any Subsidiary
in the Parent by way of loans or advances; (f) Investments incurred in order to
consummate Acquisitions otherwise permitted herein, PROVIDED, THAT such
Acquisition shall have been approved or consented to by the board of directors
or similar governing entity of the Person being acquired; and (g) acquisition of
not more than 5% of the outstanding equity securities of any Person (other than
the Borrower); PROVIDED, HOWEVER, that (A) any Investment which when made
complies with the requirements of the definition of the term "CASH
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EQUIVALENT INVESTMENT" may continue to be held notwithstanding that such
Investment if made thereafter would not comply with such requirements; (B) no
Investment otherwise permitted by CLAUSE (g) shall be permitted to be made if,
immediately before or after giving effect thereto, any Default shall have
occurred and be continuing; and (C) any Investment otherwise permitted by
CLAUSES (d), (e), (f) or (g) in an entity engaged in or to be engaged in the
natural gas, natural gas liquids or crude oil or other energy marketing business
shall be structured in a manner acceptable to the Required Lenders.
SECTION 7.2.6 [INTENTIONALLY LEFT BLANK].
SECTION 7.2.7 RENTAL OBLIGATIONS. The Borrower will not, and will not
permit any of its Subsidiaries to, enter into at any time any arrangement
(excluding oil and gas leases entered into in the ordinary course of business
and arrangements which create Capitalized Lease Liabilities permitted under
SECTION 7.2.2(d)) which involves the leasing by the Borrower or any of its
Subsidiaries from any lessor of any real or personal property (or any interest
therein), including, without limitation, pursuant to any sale-leaseback
transaction, except arrangements which, together with all other such
arrangements entered into by the Parent and all of the Parent's Subsidiaries
(including the Borrower) which shall then be in effect will not require the
payment of an aggregate amount of rentals by the Borrower and its Subsidiaries
during the full remaining term of such arrangements in excess of (excluding
escalations resulting from a rise in the consumer price or similar index) U.S.
$15,000,000; PROVIDED, HOWEVER, that any calculation made for purposes of this
Section shall exclude any amounts required to be expended for maintenance and
repairs, insurance, taxes, assessments, and other similar charges.
SECTION 7.2.8 CONSOLIDATION, MERGER, ETC. The Borrower will not, and
will not permit any of its Subsidiaries to, liquidate or dissolve, amalgamate
with, consolidate with, or merge into or with, any other corporation, or
purchase or otherwise acquire all or substantially all of the assets of any
Person (or of any division thereof) except (a) any such Subsidiary may liquidate
or dissolve voluntarily into, and may merge with and into, the Borrower or any
other Subsidiary; and (b) so long as no Default has occurred and is continuing
or would occur after giving effect thereto, in connection with Investments
permitted by SECTION 7.2.5, the Borrower or any of its Subsidiaries may purchase
all or substantially all of the assets of any Person, or acquire such Person by
merger, if the Borrower (if a party to such merger) or such Subsidiary (if the
Borrower is not a party to such merger) is the survivor of such merger.
SECTION 7.2.9 ASSET DISPOSITIONS, ETC. (a) The Borrower will not, and
will not permit any of its Subsidiaries to, sell, transfer, lease, contribute or
otherwise convey, or grant options, warrants or other rights with respect to,
all or any substantial part of its assets (including capital stock of
Subsidiaries) to any Person.
(b) The Borrower will not, and will not permit any of its
Subsidiaries to, sell, convey, contribute or transfer (each, a "Disposition")
any asset (including, without limitation, any sale or assignment with or without
recourse of any receivable) except: (i) retirement of assets in the
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ordinary course of business; (ii) the Disposition of any asset or assets,
PROVIDED, THAT the aggregate fair market value of all assets which are the
subject of such Dispositions by the Parent and its Subsidiaries (including the
Borrower) in any calendar year does not exceed U.S. $10,000,000 (for purposes of
determining compliance with the foregoing, (x) the fair market value of an asset
shall mean the fair market value at the time of the Disposition thereof; and (y)
Dispositions by the Borrower or any of its Subsidiaries to a Wholly-Owned
Subsidiary of the Parent or to the Parent shall be excluded); (iii) the sale of
Oil and Gas production and inventory in the ordinary course of business,
including in connection with hedge agreements or pursuant to long-term
contracts; (iv) any conveyance or transfer by a Subsidiary of the Borrower to
the Borrower, or by a Subsidiary of the Borrower to a wholly owned Subsidiary of
Borrower; (v) transfers by the Borrower to a Subsidiary permitted by SECTION
7.2.5; and (vi) transfers of Hydrocarbon Interests which transfers constitute
payments in kind pursuant to the Incentive Payments Agreement. Notwithstanding
the foregoing, the Borrower shall not, nor shall the Borrower permit any of its
Subsidiaries to, transfer any assets, other than the sale of Oil and Gas
production and inventory and payment of trade payables in the ordinary course of
business pursuant to SECTION 7.2.9(b)(iii), to any Person pursuant to this
SECTION 7.2.9 if a Default shall have occurred and be continuing or would
otherwise be existing after, or result from, any such transfer.
SECTION 7.2.10 SUBORDINATED DEBT DOCUMENTS. The Parent will not, and
will not permit any of its Subsidiaries to, amend any Subordinated Debt Document
unless approved in writing by the Required Lenders (other than ministerial
amendments and amendments to extend the time or times for payment). The Parent
shall not make any payments of interest or any other amounts in respect of the
Subordinated Debt if a Default shall have occurred and be continuing or would
result from such payment. The Parent will not prepay any principal, interest or
other indebtedness in respect of Subordinated Debt, or make any redemption or
acquisition for value or defeasance, refinancing or exchange (other than for PIK
Notes) thereof or therefor, or make any payments in contravention of the
Subordination Agreement. Any PIK Notes shall have the same terms as the related
Subordinated Notes, except as otherwise approved by the Required Lenders, and
shall be considered Subordinated Notes for purposes of this Agreement and the
Subordination Agreement.
SECTION 7.2.11 TRANSACTIONS WITH AFFILIATES. The Borrower will not, and
will not permit any of its Subsidiaries to, enter into, or cause, suffer or
permit to exist any arrangement or contract with any of its other Affiliates
unless such arrangement or contract is fair and equitable to the Borrower or
such Subsidiary and is an arrangement or contract of the kind which would be
entered into by a prudent Person in the position of the Borrower or such
Subsidiary with a Person which is not one of its Affiliates.
SECTION 7.2.12 NEGATIVE PLEDGES, RESTRICTIVE AGREEMENTS, ETC. (a) The
Borrower will not, and will not permit any of its Subsidiaries to, enter into
any agreement (excluding this Agreement, any other Loan Document and Loan
Documents as defined in the U.S. Credit Agreement) prohibiting or restricting
the creation or assumption of any Lien upon its properties, revenues or assets,
whether now owned or hereafter acquired, or the ability of the Borrower or any
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other Obligor to amend or otherwise modify this Agreement or any other Loan
Document or the ability of the Borrower or any Subsidiary to make any payments,
directly or indirectly, to the Borrower or to the Parent by way of dividends,
advances, repayments of loans or advances, reimbursements of management and
other intercompany charges, expenses and accruals or other returns on
investments, or any other agreement or arrangement which restricts the ability
of any such Subsidiary to make any payment, directly or indirectly, to the
Borrower or the ability of the Borrower to make any payment, directly or
indirectly, to the Parent. Notwithstanding the foregoing, documents governing a
Capitalized Lease Liability or a purchase money Lien permitted by SECTION
7.2.3(q) and (r) may prohibit other Liens on the asset encumbered by such Lien.
(b) The Borrower will not, and will not permit any of its
Subsidiaries to, enter into any agreement governing Indebtedness if such
agreement contains covenants or events of default that are more restrictive than
those contained in this Agreement; PROVIDED, HOWEVER, that the foregoing
restriction shall not apply to the Loan Documents as defined in the U.S. Credit
Agreement.
SECTION 7.2.13 AMENDMENTS TO INCENTIVE PAYMENTS AGREEMENT. The Borrower
will not amend or permit any amendment to the Incentive Payments Agreement or
any other agreement which would have the effect of increasing the amount of any
Incentive Payments or making such amounts due sooner, or which could otherwise
have an adverse effect on the Lenders' interests hereunder. The Borrower will
not, and will not permit any of its Subsidiaries to, make any payments (either
in cash or in kind) under the Incentive Payments Agreement after the occurrence
of and during the continuation of any Default hereunder.
SECTION 7.2.14 USE OF PROCEEDS. No proceeds of any Loan will be used to
acquire any equity security of a class which is publicly traded or is registered
pursuant to Section 12 of the Securities Exchange Act of 1934 or any Margin
Stock except in connection with transactions (a) authorized by the board of
directors of the Borrower, (b) either (i) authorized by the board of directors
or other governing body of the Person which stock is being acquired or (ii)
involving less than 5% of the stock of any Person (except the Borrower) and (c)
which would not cause the Borrower to fail to be in compliance with SECTION 6.17
and which would not cause the Loans or the Lenders to be in violation of
Regulation U.
ARTICLE VIII
EVENTS OF DEFAULT
SECTION 8.1 LISTING OF EVENTS OF DEFAULT. Each of the following events
or occurrences described in this SECTION 8.1 shall constitute an "EVENT OF
DEFAULT."
SECTION 8.1.1 NON-PAYMENT OF OBLIGATIONS. The Borrower shall default in
the payment or prepayment when due of any principal of or interest on any Loan,
or the Borrower shall default (and such default shall continue unremedied for a
period of five days) in the payment when due of any Commitment Fee or of any
other Obligation.
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SECTION 8.1.2 BREACH OF WARRANTY. Any representation or warranty of the
Borrower or any other Obligor made or deemed to be made hereunder or in any
other Loan Document executed by it or any other writing or certificate furnished
by or on behalf of the Borrower or any other Obligor to the Canadian
Administrative Agent or any Lender for the purposes of or in connection with
this Agreement or any such other Loan Document (including any certificates
delivered pursuant to ARTICLE V) is or shall be incorrect when made in any
material respect.
SECTION 8.1.3 NON-PERFORMANCE OF CERTAIN COVENANTS AND OBLIGATIONS. The
Borrower shall default in the due performance and observance of any of its
obligations under SECTION 7.1.1(d) or SECTION 7.2 which default continues
unremedied for ten (10) days.
SECTION 8.1.4 NON-PERFORMANCE OF OTHER COVENANTS AND OBLIGATIONS. Any
Obligor shall default in the due performance and observance of any other
agreement, covenant or obligation contained herein or in any other Loan Document
executed by it, and such default shall continue unremedied for a period of
thirty (30) days after notice thereof shall have been given to the Borrower by
the Canadian Administrative Agent or any Lender.
SECTION 8.1.5 DEFAULT UNDER OTHER INDEBTEDNESS OR U.S. CREDIT
AGREEMENT.
(a) The Parent or any of its Subsidiaries (i) fails to
make any payment when due (whether by scheduled maturity, required prepayment,
acceleration, demand or otherwise) in respect of any Indebtedness (other than
Indebtedness hereunder or under the U.S. Credit Agreement) having an aggregate
principal amount (including undrawn committed or available amounts and including
amounts owing to all creditors under any combined or syndicated credit
arrangement) of more than U.S. $3,500,000 or (ii) fails to observe or perform
any other agreement or condition relating to any such Indebtedness or contained
in any instrument or agreement evidencing, securing or relating thereto, or any
other event occurs, the effect of which default or other event is to cause, or
to permit the holder or holders of such Indebtedness or a trustee or agent on
behalf of such holder or holders to cause, with the giving of notice if
required, such Indebtedness to be demanded or to become due or to be repurchased
or redeemed (automatically or otherwise) prior to its stated maturity; or
(b) An "Event of Default" occurs as defined in the U.S.
Credit Agreement or in any replacement or refinancing thereof.
SECTION 8.1.6 JUDGMENTS.
(a) Any final judgment or order for the payment of money
in excess of U.S. $3,500,000 shall be rendered against the Parent or any of its
Subsidiaries and either (i) enforcement proceedings shall have been commenced by
any creditor upon such judgment or order; or (ii) there shall be any period of
15 consecutive days during which a stay of enforcement of such judgment or
order, by reason of a pending appeal or otherwise, shall not be in effect.
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(b) Any non-monetary final judgment shall be rendered
that has, or would reasonably be expected to have, a Material Adverse Effect
and, in either case, (i) enforcement proceedings are commenced by any creditor
upon such judgment or order, or (ii) there is a period of 15 consecutive days
during which a stay of enforcement of such judgment, by reason of a pending
appeal or otherwise, is not in effect.
SECTION 8.1.7 DEFAULT UNDER PARENT GUARANTY. An Event of Default occurs
as defined in the Parent Guaranty.
SECTION 8.1.8 CONTROL OF THE BORROWER. Any Change in Control (Canadian
Borrower) shall occur.
SECTION 8.1.9 BANKRUPTCY, INSOLVENCY, ETC. The Parent, Borrower or any
of their respective Subsidiaries shall (a) become insolvent or generally fail to
pay, or admit in writing its inability or unwillingness to pay, debts as they
become due; (b) apply for, consent to, or acquiesce in, the appointment of a
trustee, receiver, sequestrator or other custodian for the Parent, Borrower or
any of their respective Subsidiaries or any property of any thereof, or make a
general assignment for the benefit of creditors; (c) in the absence of such
application, consent or acquiescence, permit or suffer to exist the appointment
of a trustee, receiver, sequestrator or other custodian for the Parent, Borrower
or any of their respective Subsidiaries or for a substantial part of the
property of any thereof, and such trustee, receiver, sequestrator or other
custodian shall not be discharged within 60 days, PROVIDED, THAT the Parent,
Borrower, and each Subsidiary hereby expressly authorizes each of the Canadian
Administrative Agent and the Administrative Agent and each Lender to appear in
any court conducting any relevant proceeding during such 60-day period to
preserve, protect and defend their rights under the Loan Documents; (d) permit
or suffer to exist the commencement of any bankruptcy, reorganization, debt
arrangement or other case or proceeding under any bankruptcy or insolvency law
including the Bankruptcy and Insolvency Act (Canada) and the Companies'
Creditors Arrangement Act (Canada), as each are from time to time amended, or
any dissolution, winding up or liquidation proceeding, in respect of the Parent,
Borrower or any of their respective Subsidiaries or any other Obligor, and, if
any such case or proceeding is not commenced by the Parent, Borrower or such
Subsidiary, such case or proceeding shall be consented to or acquiesced in by
the Parent, Borrower or such Subsidiary or shall result in the entry of an order
for relief or shall remain for 60 days undismissed, PROVIDED, THAT the Parent,
Borrower, and each Subsidiary hereby expressly authorizes the Canadian
Administrative Agent and the Administrative Agent and each Lender to appear in
any court conducting any such case or proceeding during such 60-day period to
preserve, protect and defend their rights under the Loan Documents; or (e) take
any corporate or partnership action authorizing, or in furtherance of, any of
the foregoing.
SECTION 8.1.10 IMPAIRMENT OF SECURITY, ETC. Except as a direct result
of the acts or omissions of the Canadian Administrative Agent, the
Administrative Agent or any Lender, any Loan Document, or any Lien granted
thereunder, shall (except in accordance with its terms), in whole or in part,
terminate, cease to be effective or cease to be the legally valid, binding and
enforceable obligation of any Obligor party thereto; the Borrower, any other
Obligor or any other party shall,
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directly or indirectly, contest in any manner such effectiveness, validity,
binding nature or enforceability; or for a period of ten days following the
earlier of the date the Borrower has knowledge thereof or the Borrower receives
notice from the Canadian Administrative Agent, the Administrative Agent or any
Lender thereof, any Lien securing any Obligation shall, in whole or in part,
cease to be a perfected first priority Lien, subject only to those exceptions
expressly permitted by such Loan Document.
SECTION 8.1.11 DEFAULT UNDER MATERIAL AGREEMENT. The Borrower or any of
its Subsidiaries shall default in or breach the performance or observance of any
provision of any material contract or agreement to which it is a party or it or
its property is bound if such default or breach could result in the opinion of
the Canadian Administrative Agent and the Required Lenders in a Material Adverse
Effect and if such default or breach is not cured within thirty (30) days of the
Borrower's knowledge of such breach or default.
SECTION 8.1.12 INVALIDITY OF LOAN DOCUMENTS. Any Loan Document, at any
time after its execution and delivery and for any reason other than the
agreement of the requisite percentage of Lenders or satisfaction in full of all
the Obligations, ceases to be in full force and effect, or is declared by a
court of competent jurisdiction to be null and void, invalid or unenforceable in
any respect; or any Obligor denies that it has any or further liability or
obligation under any Loan Document, or purports to revoke, terminate, rescind or
invalidate any Loan Document in whole or in part.
SECTION 8.2 ACTION IF BANKRUPTCY. If any Event of Default described in
CLAUSES (a) through (d) of SECTION 8.1.9 shall occur with respect to the
Borrower or any Obligor, the Commitments (if not theretofore terminated) shall
automatically terminate and the outstanding principal amount of all outstanding
Loans and all other Obligations shall automatically be and become immediately
due and payable, without presentment, demand, protest, notice of intent to
accelerate, notice of acceleration, notice of any other kind or demand.
SECTION 8.3 ACTION IF OTHER EVENT OF DEFAULT. If any Event of Default
(other than any Event of Default described in CLAUSES (a) through (d) of SECTION
8.1.9 with respect to the Borrower or any other Obligor) shall occur for any
reason, whether voluntary or involuntary, and be continuing, the Canadian
Administrative Agent shall, upon the direction of, or may, with the consent of,
the Required Lenders, by notice to the Borrower (a) declare all or any portion
of the outstanding principal amount of the Loans and other Obligations to be due
and payable and/or the Commitments (if not theretofore terminated) to be
terminated, whereupon the full unpaid amount of such Loans and other Obligations
which shall be so declared due and payable shall be and become immediately due
and payable, without notice of intent to accelerate, notice of acceleration,
notice of any other kind, protest, demand or presentment, and/or, as the case
may be, the Commitments shall terminate; (b) require that the Borrower Cash
Collateralize its Obligations in respect of Letters of Credit in an amount equal
to 110% of the then aggregate Stated Amount of all Letters of Credit outstanding
and undrawn; and (c) exercise on behalf of itself and the Lenders all rights and
remedies available to it and the Lenders under the Loan Documents or applicable
law.
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ARTICLE IX
THE AGENTS
SECTION 9.1 ACTIONS. Each Lender hereby appoints BofA Canada as its
Canadian Administrative Agent, and appoints Bank of America, N.A. as its
Administrative Agent under and for purposes of this Agreement, the Intercreditor
Agreement, the Notes and each other Loan Document. Each Lender authorizes each
Agent to act on behalf of such Lender under this Agreement, the Intercreditor
Agreement, the Notes and each other Loan Document and, in the absence of other
written instructions from the Required Lenders received from time to time by the
Agents (with respect to which the Agents agree that they will comply, except as
otherwise provided in this Section or the Intercreditor Agreement or as
otherwise advised by counsel), to exercise such powers hereunder and thereunder
as are specifically delegated to or required of the Agents by the terms hereof
and thereof, together with such powers as may be reasonably incidental thereto.
Each Lender hereby indemnifies (which indemnity shall survive any termination of
this Agreement)each Agent, PRO RATA according to such Lender's Percentage, from
and against any and all liabilities, obligations, losses, damages, claims, costs
or expenses of any kind or nature whatsoever which may at any time be imposed
on, incurred by, or asserted against, such Agent in any way relating to or
arising out of this Agreement, the Intercreditor Agreement, the Notes and any
other Loan Document, including reasonable attorneys' fees, and as to which such
Agent is not reimbursed by the Borrower; WHETHER OR NOT ARISING OUT OF THE
NEGLIGENCE OF SUCH AGENT, PROVIDED, HOWEVER, that no Lender shall be liable for
the payment of any portion of such liabilities, obligations, losses, damages,
claims, costs or expenses which are determined by a court of competent
jurisdiction in a final proceeding to have resulted solely from such Agent's
gross negligence or wilful misconduct. Neither Agent shall be required to take
any action hereunder, under the Intercreditor Agreement, the Notes or under any
other Loan Document, or to prosecute or defend any suit in respect of this
Agreement, the Notes or any other Loan Document, unless it is indemnified to its
satisfaction. If any indemnity in favor of an Agent shall be or become, in such
Agent's determination, inadequate, such Agent may call for additional
indemnification from the Lenders and cease to do the acts indemnified against
hereunder until such additional indemnity is given.
SECTION 9.2 FUNDING RELIANCE, ETC.
(a) Unless the Canadian Administrative Agent shall have been
notified by telephone, confirmed in writing, by any Lender by 10:30 p.m.,
Toronto, Ontario time, on the day of a Borrowing that such Lender will not make
available the amount which would constitute its Percentage of such Borrowing on
the date specified therefor, the Canadian Administrative Agent may assume that
such Lender has made such amount available to the Canadian Administrative Agent
and, in reliance upon such assumption, make available to the Borrower a
corresponding amount. If and to the extent that such Lender shall not have made
such amount available to the Canadian Administrative Agent, such Lender and the
Borrower severally agree to repay the Canadian Administrative Agent forthwith on
demand such corresponding amount together with interest thereon, for each day
from the date the Canadian Administrative Agent made such amount available
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to the Borrower to the date such amount is repaid to the Canadian Administrative
Agent, at the Canadian Cost of Funds Rate applicable at the time.
(b) Unless the Canadian Administrative Agent shall have been
notified by telephone, confirmed in writing, by the Borrower prior to the date
any payment to be made by it hereunder is due, that it does not intend to remit
such payment, the Canadian Administrative Agent may, in its sole and absolute
discretion, assume that the Borrower has timely remitted such payment and may,
in its sole and absolute discretion and in reliance thereon, make available such
payment to the Person entitled thereto. If such payment is not in fact remitted
to the Canadian Administrative Agent in immediately available funds, then each
Lender shall forthwith on demand repay to the Canadian Administrative Agent the
amount of such assumed payment made available to such Lender, together with
interest thereon in respect of each day from and including the date such amount
was made available by the Canadian Administrative Agent to such Lender to the
date such amount is repaid to the Canadian Administrative Agent at the Canadian
Cost of Funds Rate applicable at the time.
SECTION 9.3 EXCULPATION. Neither Agent nor any of its directors,
officers, employees or agents shall be liable to any Lender for any action taken
or omitted to be taken by it under this Agreement, the Intercreditor Agreement
or any other Loan Document, or in connection herewith or therewith, except for
its own wilful misconduct or gross negligence, nor responsible for any recitals
or warranties herein or therein, nor for the effectiveness, enforceability,
validity or due execution of this Agreement or any other Loan Document, nor for
the creation, perfection or priority of any Liens purported to be created by any
of the Loan Documents, or the validity, genuineness, enforceability, existence,
value or sufficiency of any collateral security, nor to make any inquiry
respecting the performance by the Borrower of its obligations hereunder or under
any other Loan Document. Any such inquiry which may be made by an Agent shall
not obligate it to make any further inquiry or to take any action. Each Agent
shall be entitled to rely upon advice of counsel concerning legal matters and
upon any notice, consent, certificate, statement or writing which such Agent
believes to be genuine and to have been presented by a proper Person.
SECTION 9.4 SUCCESSOR. The Canadian Administrative Agent may resign as
such, and the Administrative Agent may resign as such, in each case at any time
upon at least thirty (30) days' prior notice to the Borrower and all Lenders. If
either Agent at any time shall so resign, the Required Lenders may appoint
another Lender as a successor Canadian Administrative Agent, and may appoint
another Lender or another lender under the U. S. Credit Agreement as successor
Administrative Agent for the Lenders hereunder, which shall thereupon become the
Canadian Administrative Agent, or Administrative Agent, as applicable,
hereunder. If no successor Canadian Administrative Agent (or, if applicable,
successor Administrative Agent) shall have been so appointed by the Required
Lenders, and shall have accepted such appointment, within thirty (30) days after
the retiring Agent's giving notice of resignation, then the retiring Agent may,
on behalf of the Lenders, appoint a successor Agent. In the case of a successor
Canadian Administrative Agent, such successor shall be one of the Lenders or a
commercial banking institution organized under the laws of Canada, and having a
combined capital and surplus of at least the Canadian Dollar Equivalent of U.S.
$500,000,000. In the case of a successor Administrative Agent, such successor
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shall be one of the Lenders or one of the Lenders as defined in the U.S. Credit
Agreement or a commercial banking institution organized under the laws of Canada
or the United States, and having a combined capital and surplus of at least the
Canadian Dollar Equivalent of U.S. $500,000,000. Notwithstanding the foregoing,
so long as Canadian Administrative Agent is a Schedule II Bank, Canadian
Administrative Agent may appoint an Affiliate as successor Administrative Agent
by providing prior written notice of such appointment to Borrower,
Administrative Agent, and Lenders. Upon the acceptance of any appointment as
Canadian Administrative Agent (or, if applicable, successor Administrative
Agent) hereunder by a successor Canadian Administrative Agent (or, if
applicable, successor Administrative Agent), such successor Agent shall be
entitled to receive from the retiring Agent such documents of transfer and
assignment as such successor Agent may reasonably request, and shall thereupon
succeed to and become vested with all rights, powers, privileges and duties of
the retiring Agent, and the retiring Agent shall be discharged from its duties
and obligations under this Agreement. After any retiring Agent's resignation
hereunder, the provisions of (a) this ARTICLE IX shall inure to its benefit as
to any actions taken or omitted to be taken by it while it was an Agent under
this Agreement; and (b) SECTION 10.3 and SECTION 10.4 shall continue to inure to
its benefit.
SECTION 9.5 LOANS BY BOFA CANADA AND BANK OF AMERICA, N.A. BofA Canada
and Bank of America, N.A. shall have the same rights and powers with respect to
(a) the Loans made by it or any of its Affiliates, and (b) the Notes held by it
or any of its Affiliates as any other Lender and may exercise the same as if it
were not an Agent. BofA Canada, Bank of America, N.A. and their respective
Affiliates may accept deposits from, lend money to, and generally engage in any
kind of business with the Borrower or any Subsidiary or Affiliate of the
Borrower as if BofA Canada and Bank of America, N.A. were not Agents hereunder.
SECTION 9.6 CREDIT DECISIONS. Each Lender acknowledges that it has,
independently of the Agents and each other Lender, and based on such Lender's
review of the financial information of the Borrower, this Agreement, the other
Loan Documents (the terms and provisions of which being satisfactory to such
Lender) and such other documents, information and investigations as such Lender
has deemed appropriate, made its own credit decision to extend its Commitments.
Each Lender also acknowledges that it will, independently of the Agents and each
other Lender, and based on such other documents, information and investigations
as it shall deem appropriate at any time, continue to make its own credit
decisions as to exercising or not exercising from time to time any rights and
privileges available to it under this Agreement or any other Loan Document.
SECTION 9.7 COPIES, ETC. The Canadian Administrative Agent shall give
prompt notice to each Lender of each notice or request required or permitted to
be given to the Canadian Administrative Agent by the Borrower pursuant to the
terms of this Agreement (unless concurrently delivered to the Lenders by the
Borrower). The Canadian Administrative Agent will distribute to each Lender each
document or instrument received for its account and copies of all other
communications received by the Canadian Administrative Agent from the Borrower
for distribution to the Lenders by the Canadian Administrative Agent in
accordance with the terms of this Agreement.
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SECTION 9.8 DEFAULT; COLLATERAL.
(a) Upon the occurrence and continuance of a Default, the
Lenders agree to promptly confer in order that Required Lenders or the Lenders,
as the case may be, may agree upon a course of action for the enforcement of the
rights of the Lenders; and the Agents shall be entitled to refrain from taking
any action (without incurring any liability to any Person for so refraining)
UNLESS and until the Agents shall have received instructions from Required
Lenders. Subject to the Intercreditor Agreement for so long as it is in effect,
all rights of action under the Loan Documents and all right to the Collateral,
if any, hereunder may be enforced by the Agents and any suit or proceeding
instituted by the Agents in furtherance of such enforcement shall be brought in
its name as the applicable Agent without the necessity of joining as plaintiffs
or defendants any other Lender, and the recovery of any judgment shall be for
the benefit of the Lenders (and, with respect to Lender Hedging Agreements,
Affiliates, if applicable) subject to the expenses of the applicable Agent(s).
In actions with respect to any property of the Borrower or any other Obligor,
the Agents are acting for the ratable benefit of each Lender (and, with respect
to Lender Hedging Agreement, Affiliates, if applicable). Any and all agreements
to subordinate (whether made heretofore or hereafter) other indebtedness or
obligations of Borrower to the Obligation shall be construed as being for the
ratable benefit of each Lender (and, with respect to Lender Hedging Agreement,
Affiliates, if applicable).
(b) Each Lender authorizes and directs the Administrative
Agent to enter into the Collateral Documents for the benefit of the Lenders
(and, with respect to Lender Hedging Agreement, Affiliates, if applicable).
Except to the extent unanimity (or other percentage set forth in SECTION 10.1)
is required hereunder, each Lender agrees that any action taken by the Required
Lenders in accordance with the provisions of the Loan Documents, and the
exercise by the Required Lenders of the power set forth herein or therein,
together with such other powers as are reasonably incidental thereto, shall be
authorized and binding upon all of the Lenders.
(c) Each Agent is hereby authorized on behalf of all of
the Lenders, without the necessity of any notice to or further consent from any
Lender, from time to time to take any action with respect to any Collateral or
Collateral Documents which may be necessary to perfect and maintain perfected
the Liens upon the collateral granted pursuant to the Collateral Documents.
(d) Neither Agent shall have any obligation whatsoever to
any Lender or to any other Person to assure that the Collateral exists or is
owned by any Obligor or is cared for, protected, or insured or has been
encumbered or that the Liens granted to either Agent have been properly or
sufficiently or lawfully created, perfected, protected, or enforced, or are
entitled to any particular priority, or to exercise at all or in any particular
manner or under any duty of care, disclosure, or fidelity, or to continue
exercising, any of the Rights granted or available to the Agents in this
Agreement or in any of the Collateral Documents; it being understood and agreed
that in respect of the Collateral, or any act, omission, or event related
thereto, subject to the Intercreditor Agreement, each Agent may act in any
manner it may deem appropriate, in its sole discretion, given the such Agent's
own interest in the Collateral as one of the Lenders and that such Agent shall
have no duty
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or liability whatsoever to any Lender, other than to act without gross
negligence or willful misconduct.
(e) The Lenders hereby irrevocably authorize each Agent,
at its option and in its discretion, to release any Lien granted to or held by
such Agent upon any Collateral: (i) constituting property in which no Obligor
owned an interest at the time the Lien was granted or at any time thereafter;
(ii) constituting property leased to an Obligor under a lease which has expired
or been terminated in a transaction permitted under the Loan Document or is
about to expire and which has not been, and is not intended by such Obligor to
be, renewed; and (iii) consisting of an instrument evidencing Indebtedness
pledged to such Agent (for the benefit of the Lenders), if the Indebtedness
evidenced thereby has been paid in full. In addition, the Lenders irrevocably
authorize each Agent to release Liens upon Collateral as contemplated in SECTION
10.1(b), (c) or (d), or if approved, authorized, or ratified in writing by the
requisite Lenders. Upon request by an Agent at any time, the Lenders will
confirm in writing such Agent's authority to release particular types or items
of Collateral pursuant to this SECTION 9.8.
(f) In furtherance of the authorizations set forth in
this SECTION 9.8, each Lender hereby irrevocably appoints each of the Canadian
Administrative Agent and the Administrative Agent, its attorney-in-fact, with
full power of substitution, for and on behalf of and in the name of each such
Lender, subject to the Intercreditor Agreement (i) to enter into Collateral
Documents (including, without limitation, any appointments of substitute
trustees under any Collateral Documents), (ii) to take action with respect to
the Collateral and Collateral Documents to perfect, maintain, and preserve
Lenders' Liens, and (iii) to execute instruments of release or to take other
action necessary to release Liens upon any Collateral to the extent authorized
in paragraph (e) hereof. This power of attorney shall be liberally, not
restrictively, construed so as to give the greatest latitude to each Agent's
power, as attorney, relative to the Collateral matters described in this SECTION
9.8. The powers and authorities herein conferred on each Agent may be exercised
by such Agent through any Person who, at the time of the execution of a
particular instrument, is an officer of such Agent. The power of attorney
conferred by this SECTION 9.8(f) is granted for valuable consideration and is
coupled with an interest and is irrevocable so long as the Obligations, or any
part thereof, shall remain unpaid or the Lenders are obligated to make any
Borrowings under the Loan Documents.
SECTION 9.9 LENDER HEDGING AGREEMENTS. To the extent any Lender or any
Affiliate of a Lender is a party to a Lender Hedging Agreement in accordance
with the requirements of the Loan Documents and accepts the benefits of the
Liens in the Collateral arising pursuant to the Collateral Documents, such
Lender (for itself and on behalf of any such Affiliates) shall be deemed (a)
subject to the Intercreditor Agreement, to appoint either of Bank of America
Canada and Bank of America, N.A., as its nominee and agent, to act for and on
behalf of such Lender or Affiliate thereof in connection with the Collateral
Documents and (b) to be bound by the terms of this ARTICLE IX.
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ARTICLE X
MISCELLANEOUS PROVISIONS
SECTION 10.1 WAIVERS, AMENDMENTS, RELEASE OF COLLATERAL, ETC. (a) The
provisions of this Agreement and of each other Loan Document may from time to
time be amended, modified or waived, if such amendment, modification or waiver
is in writing and consented to by the Borrower and the Required Lenders;
PROVIDED, HOWEVER, that no such amendment, modification or waiver which would:
(a) modify any requirement hereunder that any particular action be taken by all
the Lenders or by the Required Lenders shall be effective unless consented to by
each Lender; (b) modify this SECTION 10.1, change the definition of "REQUIRED
LENDERS," increase any Commitment Amount (except as set forth in SECTION 2.5.1)
or the Percentage of any Lender, reduce any fees described in ARTICLE III,
release any material portion of the Collateral, except as set forth in SECTION
9.8 and SECTIONS 10.1(b), (c) and (d) or otherwise specifically provided in any
Loan Document, release any material Guarantor (except as provided in SECTION
10.1(d)), or extend any Commitment Termination Date, shall be made without the
consent of each Lender and each holder of a Note; (c) extend the due date for,
or reduce the amount of, any scheduled repayment or prepayment of principal of
or interest on any Loan (or reduce the principal amount of or rate of interest
on any Loan) shall be made without the consent of the holder of that Note
evidencing such Loan; (d) affect adversely the interests, rights or obligations
of the Canadian Administrative Agent or the Administrative Agent, shall be made
without consent of the Canadian Administrative Agent or the Administrative
Agent, as applicable; or (e) affect adversely the interests, rights or
obligations of an Issuer in its capacity as such, shall be made without consent
of such Issuer. No failure or delay on the part of any Agent, any Lender or the
holder of any Note in exercising any power or right under this Agreement or any
other Loan Document shall operate as a waiver thereof, nor shall any single or
partial exercise of any such power or right preclude any other or further
exercise thereof or the exercise of any other power or right. No notice to or
demand on the Borrower in any case shall entitle it to any notice or demand in
similar or other circumstances. No waiver or approval by the Canadian
Administrative Agent or the Administrative Agent, any Lender or the holder of
any Note under this Agreement or any other Loan Document shall, except as may be
otherwise stated in such waiver or approval, be applicable to subsequent
transactions. No waiver or approval hereunder shall require any similar or
dissimilar waiver or approval thereafter to be granted hereunder.
(b) Upon any sale, transfer, or disposition of Collateral
which is permitted pursuant to the Loan Documents, and upon ten (10) Business
Days' prior written request by the Borrower (which request must be accompanied
by (a) true and correct copies of all material documents of transfer or
disposition, including any contract of sale, (ii) a preliminary closing
statement and instructions to the title company, if any, and (iii) all requested
release instruments in form and substance satisfactory to the Administrative
Agent), the Administrative Agent shall (and is hereby irrevocably authorized by
the Lenders to) execute such documents as may be necessary to evidence the
release of Liens granted to the Administrative Agent for the benefit of the
Lenders pursuant hereto in such Collateral. The Administrative Agent shall not
be required to execute any release instruments on terms which, in the
Administrative Agent's opinion, would expose the Administrative Agent to
liability or create any obligation or entail any consequence other than the
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release of liens without recourse or warranty. No such release shall impair the
Administrative Agent's lien on the proceeds of sale of such Collateral.
(c) If all outstanding Loans and other Obligations have
been paid in full and no Letters of Credit are outstanding, the Commitments have
terminated or have been reduced to zero pursuant to SECTION 2.2, and, subject to
SECTION 10.1(d), all Lender Hedging Agreements have terminated, the Lenders
hereby instruct the Canadian Administrative Agent and the Administrative Agent
to, at the Borrower's expense, execute such releases of the Collateral Documents
as the Borrower shall reasonably request and this Agreement shall be deemed
terminated except that such termination shall not relieve Borrower of any
obligation to make any payments to the Canadian Administrative Agent, the
Administrative Agent or any Lender required by any Loan Document to the extent
accruing, or relating to an event occurring, prior to such termination.
Notwithstanding the foregoing, if such Liens also secure the obligations under
the U.S. Credit Agreement, such Liens may not be released unless permitted by
the terms of U.S. Credit Agreement.
(d) Notwithstanding any provision herein to the contrary,
if the Commitments as herein defined and as defined in the U.S. Credit Agreement
have been terminated, no Letters of Credit hereunder or under the U.S. Credit
Agreement are outstanding, and the only outstanding Obligations as herein
defined and as defined in the U.S. Credit Agreement are amounts owed pursuant to
one or more Lender Hedging Agreements, the Administrative Agent and the Canadian
Administrative Agent will, and are hereby authorized to, (A) release the Liens
created under the Loan Documents, and (B) release the Parent Guaranty and all
Guaranties executed by Subsidiaries of the Parent, PROVIDED, THAT
contemporaneously with such release, (i) the Parent executes a guaranty
agreement covering the obligations of the Subsidiaries that are parties to such
Lender Hedging Agreements, such guaranty to be in form and substance
satisfactory to the Lender(s) or its Affiliates that are parties to such Lender
Hedging Agreements (the "LENDER COUNTERPARTIES"), and (ii) each of the Borrower
and the Parent (A) executes a margin agreement in form and substance acceptable
to such Lender Counterparties and (B) provides collateral in the form of cash or
a letter of credit having an aggregate value acceptable to such Lender
Counterparties; and PROVIDED FURTHER, the Borrower acknowledges that if such
Liens and/or Guaranties also secure the Obligations under the U.S. Credit
Agreement, such Liens and Guaranties may not be released unless permitted by the
U.S. Credit Agreement. Any release under this SECTION 10.1(d) must be in writing
and signed by the Administrative Agent or the Canadian Administrative Agent, as
applicable.
SECTION 10.2 NOTICES. All notices and other communications provided to
any party hereto under this Agreement or any other Loan Document shall be in
writing or by facsimile and addressed, delivered or transmitted to such party at
its address or facsimile number set forth, with respect to Borrower and Canadian
Administrative Agent, below its signature hereto, and with respect to the
Lenders, on SCHEDULE IV hereto or set forth in the Lender Assignment Agreement,
or as set forth in the Intercreditor Agreement with respect to the
Administrative Agent, at such other address or facsimile number as may be
designated by such party in a notice to the other parties. Any notice, if mailed
and properly addressed with postage prepaid or if properly addressed and sent by
pre-paid
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courier service, shall be deemed given when received; any notice, if transmitted
by facsimile, shall be deemed given when transmitted.
SECTION 10.3 PAYMENT OF COSTS AND EXPENSES. The Borrower agrees to pay
within 10 days of demand all reasonable expenses of each Agent (including the
fees and out-of-pocket expenses of counsel to such Agent and of local counsel,
if any, who may be retained by counsel to the such Agent) in connection with the
negotiation, preparation, execution and delivery of this Agreement and of each
other Loan Document, including schedules and exhibits, and any amendments,
waivers, consents, supplements or other modifications to this Agreement or any
other Loan Document as may from time to time hereafter be required, whether or
not the transactions contemplated hereby are consummated, the filing, recording,
refiling or rerecording of any mortgage, any pledge agreement and any Security
Agreement and/or any other lien or notice filings relating thereto and all
amendments, supplements and modifications to any thereof and any and all other
documents or instruments of further assurance required to be filed or recorded
or refiled or rerecorded by the terms hereof or of any mortgage, any pledge
agreement or any security agreement, and the preparation and review of the form
of any document or instrument relevant to this Agreement or any other Loan
Document.
The Borrower further agrees to pay, and to save each Agent and
the Lenders harmless from all liability for, any stamp or other similar taxes
which may be payable in connection with the execution or delivery of this
Agreement, the borrowings hereunder, or the issuance of the Notes or any other
Loan Documents. The Borrower also agrees to reimburse each Agent and each Lender
upon demand for all reasonable out-of-pocket expenses (including attorneys' fees
and legal expenses) incurred by the such Agent or such Lender in connection with
the enforcement of any Obligations.
SECTION 10.4 INDEMNIFICATION. In consideration of the execution and
delivery of this Agreement by each Lender and the extension of the Commitments,
the Borrower hereby indemnifies, exonerates and holds each Agent and each of
their respective Affiliates and each Lender and each of their respective
officers, directors, employees, attorneys and agents (collectively, the
"INDEMNIFIED PARTIES") free and harmless from and against any and all actions,
causes of action, suits, losses, costs, liabilities and damages, and expenses
incurred in connection therewith (irrespective of whether any such Indemnified
Party is a party to the action for which indemnification hereunder is sought),
including reasonable attorneys' fees and disbursements and settlement costs
INCLUDING INDEMNIFIED LIABILITIES ARISING OUT OF THE NEGLIGENCE OF AN
INDEMNIFIED PARTY (collectively, the "INDEMNIFIED LIABILITIES"), incurred by the
Indemnified Parties or any of them as a result of, or arising out of, or
relating to (a) any transaction financed or to be financed in whole or in part,
directly or indirectly, with the proceeds of any Loan; (b) the entering into and
performance of this Agreement and any other Loan Document by any of the
Indemnified Parties; (c) any investigation, litigation or proceeding related to
any acquisition or proposed acquisition by the Borrower or any of its
Subsidiaries of all or any portion of the stock or assets of any Person, whether
or not such Agent or such Lender is party thereto; (d) any investigation,
litigation or proceeding related to any environmental cleanup, audit, compliance
or other matter
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relating to the protection of the environment or the release by the Borrower or
any of its Subsidiaries of any Hazardous Material; or (e) the presence on or
under, or the escape, seepage, leakage, spillage, discharge, emission,
discharging or releases from, any real property owned or operated by the
Borrower or any Subsidiary thereof of any Hazardous Material (including any
losses, liabilities, damages, injuries, costs, expenses or claims asserted or
arising under any Environmental Law), regardless of whether caused by, or within
the control of, the Borrower or such Subsidiary, except for any such Indemnified
Liabilities arising for the account of a particular Indemnified Party by reason
of the relevant Indemnified Party's gross negligence or wilful misconduct.
SECTION 10.5 SURVIVAL. The obligations of the Borrower under SECTIONS
4.3, 4.4, 4.5, 4.6, 10.3 and 10.4, and the obligations of the Lenders under
SECTION 9.1, shall in each case survive any termination of this Agreement, the
payment in full of all Obligations and the termination of all Commitments. The
representations and warranties made by each Obligor in this Agreement and in
each other Loan Document shall survive the execution and delivery of this
Agreement and each such other Loan Document.
SECTION 10.6 SEVERABILITY. Any provision of this Agreement or any other
Loan Document which is prohibited or unenforceable in any jurisdiction shall, as
to such provision and such jurisdiction, be ineffective to the extent of such
prohibition or unenforceability without invalidating the remaining provisions of
this Agreement or such Loan Document or affecting the validity or enforceability
of such provision in any other jurisdiction.
SECTION 10.7 HEADINGS. The various headings of this Agreement and of
each other Loan Document are inserted for convenience only and shall not affect
the meaning or interpretation of this Agreement or such other Loan Document or
any provisions hereof or thereof.
SECTION 10.8 EXECUTION IN COUNTERPARTS. This Agreement may be executed
by the parties hereto in several counterparts, each of which shall be executed
by the Borrower and the Canadian Administrative Agent and be deemed to be an
original and all of which shall constitute together but one and the same
agreement.
SECTION 10.9 GOVERNING LAW; SUBMISSION TO PROCESS. Except to the extent
that the law of another jurisdiction is expressly elected in a Loan Document,
the Loan Documents shall be deemed contracts and instruments made under the laws
of the Province of Alberta and shall be construed and enforced in accordance
with and governed by the laws of the Province of Alberta and the laws of Canada
applicable thereto, without regard to principles of conflicts of law. Each of
the parties hereby agrees that any legal action or proceeding against such
Borrower with respect to this Agreement, the Notes or any of the Loan Documents
may be brought in the courts of the Province of Alberta and each party submits
and attorns to, the non-exclusive jurisdiction of the aforesaid courts. Each
party waives any right to stay or to dismiss any action or proceeding brought
before said courts on the basis of forum non conveniens. Nothing herein shall
affect the right of Lender to serve process in any other manner permitted by law
or shall limit the right of Lender to bring proceedings against Borrower in the
courts of any other jurisdiction.
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SECTION 10.10 SUCCESSORS AND ASSIGNS. This Agreement shall be binding
upon and shall inure to the benefit of the parties hereto and their respective
successors and assigns; PROVIDED, HOWEVER, that: the Borrower may not assign or
transfer its rights or obligations hereunder without the prior written consent
of the Canadian Administrative Agent and all Lenders; and the rights of sale,
assignment and transfer of the Lenders are subject to SECTION 10.11.
SECTION 10.11 SALE AND TRANSFER OF LOANS AND NOTES; PARTICIPATIONS IN
LOANS AND NOTES. Each Lender may assign, or sell participations in, its Loans
and Commitments to one or more other Persons in accordance with this SECTION
10.11.
SECTION 10.11.1 ASSIGNMENTS. Any Lender, (a) with the written consents
of the Canadian Administrative Agent and, so long as no Event of Default has
occurred and is continuing, the Borrower (which consents shall not be
unreasonably delayed or withheld and which consent, in the case of the Borrower,
shall be deemed to have been given in the absence of a written notice delivered
by the Borrower to the Canadian Administrative Agent, on or before the fifth
Business Day after receipt by the Borrower of such Lender's request for consent,
stating, in reasonable detail, the reasons why the Borrower proposes to withhold
such consent) may at any time assign and delegate to one or more commercial
banks or other financial institutions, and (b) with notice to the Borrower and
the Canadian Administrative Agent, but without the consent of the Borrower or
the Canadian Administrative Agent, may assign and delegate to any of its
Affiliates or to any other Lender (each Person described in either of the
foregoing clauses as being the Person to whom such assignment and delegation is
to be made, being hereinafter referred to as an "ASSIGNEE LENDER"), all or any
fraction of such Lender's total Loans and Commitments (which assignment and
delegation shall be of a constant, and not a varying, percentage of all the
assigning Lender's Loans and Commitments) in a minimum aggregate amount of Cdn.
$5,000,000; PROVIDED, HOWEVER, that except for a Schedule III Assignment, any
such assignments by a Lender shall be pro rata with any assignment by such
Lender or an Affiliate of such Lender of its interests in the U.S. Credit
Agreement; and provided FURTHER THAT any such Assignee Lender will comply, if
applicable, with the provisions contained in the last sentence of SECTION 4.6
and FURTHER, PROVIDED, HOWEVER, that, the Borrower, each other Obligor and the
Canadian Administrative Agent shall be entitled to continue to deal solely and
directly with such Lender in connection with the interests so assigned and
delegated to an Assignee Lender until (c) written notice of such assignment and
delegation, together with payment instructions, addresses and related
information with respect to such Assignee Lender, shall have been given to the
Borrower and the Canadian Administrative Agent by such Lender and such Assignee
Lender, (d) such Assignee Lender shall have executed and delivered to the
Borrower and the Canadian Administrative Agent a Lender Assignment Agreement,
accepted by the Canadian Administrative Agent, and (e) the processing fees
described below shall have been paid. From and after the date that the Canadian
Administrative Agent accepts such Lender Assignment Agreement, (x) the Assignee
Lender thereunder shall be deemed automatically to have become a party hereto
and to the extent that rights and obligations hereunder have been assigned and
delegated to such Assignee Lender in connection with such Lender Assignment
Agreement, shall have the rights and obligations of a Lender hereunder and under
the other Loan Documents, and (y) the assignor Lender, to the extent that rights
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and obligations hereunder have been assigned and delegated by it in connection
with such Lender Assignment Agreement, shall be released from its obligations
hereunder and under the other Loan Documents. Within five (5) Business Days
after its receipt of notice that the Canadian Administrative Agent has received
an executed Lender Assignment Agreement, the Borrower shall execute and deliver
to the Canadian Administrative Agent (for delivery to the relevant Assignee
Lender) new Notes evidencing such Assignee Lender's assigned Loans and
Commitments and, if the assignor Lender has retained Loans and Commitments
hereunder, replacement Notes in the principal amount of the Loans and
Commitments retained by the assignor Lender hereunder (such Notes to be in
exchange for, but not in payment of, those Notes then held by such assignor
Lender). Each such Note shall be dated the date of the predecessor Notes. The
assignor Lender shall mark the predecessor Notes "exchanged" and deliver them to
the Borrower. Accrued interest on that part of the predecessor Notes evidenced
by the new Notes, if any, shall be paid as provided in the Lender Assignment
Agreement. Accrued interest on that part of the predecessor Notes evidenced by
the replacement Notes shall be paid to the assignor Lender. Accrued interest and
accrued fees shall be paid at the same time or times provided in the predecessor
Notes and in this Agreement. Such assignor Lender or such Assignee Lender must
also pay a processing fee to the Canadian Administrative Agent upon delivery of
any Lender Assignment Agreement in the amount of the Canadian Dollar Equivalent
of U.S. $3,500. Any attempted assignment and delegation not made in accordance
with this SECTION 10.11.1 shall be null and void.
SECTION 10.11.2 PARTICIPATIONS. Any Lender may at any time sell to one
or more commercial banks or other Persons (each of such commercial banks and
other Persons being herein called a "PARTICIPANT") participating interests in
any of the Loans, Commitments, or other interests of such Lender hereunder;
PROVIDED, HOWEVER, that (a) no participation contemplated in this SECTION 10.11
shall relieve such Lender from its Commitments or its other obligations
hereunder or under any other Loan Document, (b) such Lender shall remain solely
responsible for the performance of its Commitments and such other obligations,
(c) the Borrower and the Canadian Administrative Agent shall continue to deal
solely and directly with such Lender in connection with such Lender's rights and
obligations under this Agreement and each of the other Loan Documents, (d) no
Participant, unless such Participant is an Affiliate of such Lender, or is
itself a Lender, shall be entitled to require such Lender to take or refrain
from taking any action hereunder or under any other Loan Document, except that
such Lender may agree with any Participant that such Lender will not, without
such Participant's consent, take any actions of the type described in CLAUSE (b)
or (c) of SECTION 10.1, and (e) the Borrower shall not be required to pay any
amount under SECTION 4.6 that is greater than the amount which it would have
been required to pay had no participating interest been sold. Subject to the
above, the Borrower acknowledges and agrees that each Participant, for purposes
of SECTIONS 4.3, 4.4, 4.5, 4.6, 4.8, 10.3 and 10.4, shall be considered a
Lender.
SECTION 10.12 OTHER TRANSACTIONS. Nothing contained herein shall
preclude the Canadian Administrative Agent or any other Lender from engaging in
any transaction, in addition to those contemplated by this Agreement or any
other Loan Document, with the Borrower or any of its Affiliates in which the
Borrower or such Affiliate is not restricted hereby.
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SECTION 10.13 FORUM SELECTION AND CONSENT TO JURISDICTION.
(a) THIS AGREEMENT SHALL BE GOVERNED BY, AND CONSTRUED IN
ACCORDANCE WITH, THE LAW OF THE PROVINCE OF ALBERTA AND THE
FEDERAL LAWS OF CANADA APPLICABLE THEREIN.
(b) ANY LEGAL ACTION OR PROCEEDING WITH RESPECT TO THIS AGREEMENT
OR ANY OTHER LOAN DOCUMENT MAY BE BROUGHT IN THE COURTS OF THE
PROVINCE OF ALBERTA, AND BY EXECUTION AND DELIVERY OF THIS
AGREEMENT, EACH OF THE BORROWER, THE CANADIAN ADMINISTRATIVE
AGENT AND THE LENDERS CONSENTS, FOR ITSELF, AND IN RESPECT OF
ITS PROPERTY, TO THE NON-EXCLUSIVE JURISDICTION OF THOSE
COURTS. EACH OF THE BORROWER, THE CANADIAN ADMINISTRATIVE
AGENT AND THE LENDERS IRREVOCABLY WAIVES ANY OBJECTION,
INCLUDING ANY OBJECTION TO THE LAYING OF VENUE OR BASED ON THE
GROUNDS OF FORUM NON CONVENIENS, WHICH IT MAY NOW OR HEREAFTER
HAVE TO THE BRINGING OF ANY ACTION OR PROCEEDING IN SUCH
JURISDICTION IN RESPECT OF THIS AGREEMENT OR ANY DOCUMENT
RELATED HERETO. EACH OF THE BORROWER, THE CANADIAN
ADMINISTRATIVE AGENT AND THE LENDERS WAIVES PERSONAL SERVICE
OF ANY SUMMONS, COMPLAINT OR OTHER PROCESS, WHICH MAY BE MADE
BY ANY OTHER MEANS PERMITTED BY ALBERTA LAW.
SECTION 10.14 WAIVER OF JURY TRIAL. THE CANADIAN ADMINISTRATIVE AGENT,
THE LENDERS AND THE BORROWER HEREBY KNOWINGLY, VOLUNTARILY AND INTENTIONALLY
WAIVE ANY RIGHTS THEY MAY HAVE TO A TRIAL BY JURY IN RESPECT OF ANY LITIGATION
BASED HEREON, OR ARISING OUT OF, UNDER, OR IN CONNECTION WITH, THIS AGREEMENT OR
ANY OTHER LOAN DOCUMENT, OR ANY COURSE OF CONDUCT, COURSE OF DEALING, STATEMENTS
(WHETHER VERBAL OR WRITTEN) OR ACTIONS OF THE CANADIAN ADMINISTRATIVE AGENT, THE
LENDERS OR THE BORROWER. THE BORROWER ACKNOWLEDGES AND AGREES THAT IT HAS
RECEIVED FULL AND SUFFICIENT CONSIDERATION FOR THIS PROVISION (AND EACH OTHER
PROVISION OF EACH OTHER LOAN DOCUMENT TO WHICH IT IS A PARTY) AND THAT THIS
PROVISION IS A MATERIAL INDUCEMENT FOR THE CANADIAN ADMINISTRATIVE AGENT AND THE
LENDERS ENTERING INTO THIS AGREEMENT AND EACH SUCH OTHER LOAN DOCUMENT.
SECTION 10.15 CONFIDENTIALITY. Each Lender and the Canadian
Administrative Agent agrees to use reasonable commercial efforts not to disclose
without the prior written consent of the Borrower (other than to their
employees, auditors or counsel or to another Lender if the Lender or
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such Lender's holding or parent company or the Canadian Administrative Agent in
its sole discretion determines that any such party should have access to such
information) any confidential information with respect to the Borrower or any
Subsidiary which is furnished pursuant to this Agreement, PROVIDED, that any
Lender and the Canadian Administrative Agent may disclose any such information
(a) as has become generally available to the public, (b) as may be required or
appropriate in any report, statement or testimony submitted to any municipal,
provincial, state or Federal regulatory body having or claiming to have
jurisdiction over such Lender or the Canadian Administrative Agent or to the
Federal Reserve Board, Bank of Canada, the Office of the Superintendent of
Financial Institutions, Canada Deposit Insurance Corporation, the Federal
Deposit Insurance Corporation, National Association of Insurance Commissioners
or similar organizations (whether in the United States or elsewhere) or their
successors, (c) as may be required or appropriate in response to any summons or
subpoena or in connection with any litigation, (d) in order to comply with any
law, order, regulation or ruling applicable to such Lender or the Canadian
Administrative Agent, and (e) to any Affiliate of such Lender or Canadian
Administrative Agent.
A Lender may furnish any publicly available information
concerning the Borrower or any of its Subsidiaries in the possession of such
Lender from time to time to assignees and participants (including prospective
assignees and participants) without the consent of the Borrower. Nonpublic
information concerning the Borrower or any of its Subsidiaries shall not be
furnished by any Lender to assignees and participants (including prospective
assignees and participants) without the prior written consent of the Borrower,
which consent shall not be unreasonably withheld or delayed.
SECTION 10.16 [INTENTIONALLY LEFT BLANK]
SECTION 10.17 PRIORITY OF HEDGING OBLIGATIONS. Borrower, Lenders and
the Agents agree that (a) any amounts received in satisfaction of any
Obligations arising under the Loan Documents, including, without limitation,
Obligations under this Agreement, and any Lender Hedging Agreement, shall rank
PARI PASSU in right of payment and shall be used to repay such Obligations on a
pro rata basis, and (b) except as otherwise set forth in SECTION 10.17(a) above,
all Hedging Obligations arising in connection with any Hedging Agreement are
hereby expressly subordinated in right of payment to the prior payment in full
in cash of all Obligations under the Loan Documents, other than any Lender
Hedging Agreement.
SECTION 10.18 CERTAIN REMEDIES. Notwithstanding anything to the
contrary contained herein or in the Collateral Documents, neither the Agents nor
the Lenders shall have the right to collect income, rents, royalties, revenues,
issues, profits or proceeds from the Mortgaged Properties as therein defined
unless an Event of Default has occurred and is continuing.
SECTION 10.19 MAXIMUM RATE. It is the intention of the parties hereto
to comply strictly with applicable usury laws, if any; accordingly,
notwithstanding any provision to the contrary contained herein or in any fee
letter or other Loan Document or any other document otherwise relating hereto,
in no event shall this Agreement or any Note or such documents require or permit
the
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payment, taking, reserving, receiving, collection or charging of any sums
constituting interest under applicable laws which exceed the maximum amount
permitted by such laws. If any such excess interest is called for, contracted
for, charged, taken, reserved, or received in connection with any Loan or in any
fee letter or other Loan Document, or in any communication by the Canadian
Administrative Agent, any Lender or any other person to the Borrower or any
other person, or in the event all or part of the principal or interest of any
Loan shall be prepaid or accelerated, so that under any of such circumstances or
under any other circumstance whatsoever the amount of interest contracted for,
charged, taken, reserved, or received on the amount of principal actually
outstanding from time to time under this Agreement or any Note shall exceed the
maximum amount of interest permitted by applicable usury laws, then in any such
event it is agreed as follows: (i) the provisions of this paragraph shall govern
and control, (ii) neither the Borrower nor any other person or entity now or
hereafter liable for the payment of any Loan shall be obligated to pay the
amount of such interest to the extent such interest is in excess of the maximum
amount of interest permitted by applicable usury laws, (iii) any such excess
which is or has been received notwithstanding this paragraph shall be credited
against the then unpaid principal balance of the Loans or, if the Loans have
been or would be paid in full by such credit, refunded to the Borrower, and (iv)
the provisions of this Agreement, the Notes and the other Loan Documents, and
any communication to the Borrower, shall immediately be deemed reformed and such
excess interest reduced, without the necessity of executing any other document,
to the maximum lawful rate allowed under applicable laws as now or hereafter
construed by courts having jurisdiction hereof or thereof. Without limiting the
foregoing, all calculations of the rate of interest contracted for, charged,
collected, taken, reserved, or received in connection herewith which are made
for the purpose of determining whether such rate exceeds the maximum lawful rate
shall be made to the extent permitted by applicable laws by amortizing,
prorating, allocating and spreading during the period of the full term of the
Loans, including all prior and subsequent renewals and extensions, all interest
at any time contracted for, charged, taken, collected, reserved, or received.
The terms of this paragraph shall be deemed to be incorporated in every Loan
Document and communication relating to this Agreement, the Loans and the Notes.
In no event shall the aggregate "interest" (as defined in section 347 of the
Criminal Code (Canada)) payable under the Loan Documents exceed the maximum
effective annual rate of interest on the "credit advanced" (as defined in that
section) permitted under that section and, if any payment, collection or demand
pursuant to this Agreement in respect of "interest" (as defined in that section)
is determined to be contrary to the provisions of that section, such payment,
collection or demand shall be deemed to have been made by mutual mistake of
Borrower, the Agents and Lenders and the amount of such excess payment or
collection shall be refunded to Borrower. For purposes of the Loan Documents,
the effective annual rate of interest shall be determined in accordance with
generally accepted actuarial practices and principles over the term applicable
to the Obligations on the basis of annual compounding of the lawfully permitted
rate of interest and, in the event of dispute, a certificate of a Fellow of the
Canadian Institute of Actuaries appointed by Canadian Administrative Agent shall
be PRIMA FACIE evidence, for the purposes of such determination.
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SECTION 10.20 ENTIRE AGREEMENT.
THIS AGREEMENT AND THE OTHER LOAN DOCUMENTS REPRESENT THE
FINAL AGREEMENT BETWEEN THE PARTIES AND MAY NOT BE CONTRADICTED BY EVIDENCE OF
PRIOR, CONTEMPORANEOUS, OR SUBSEQUENT ORAL AGREEMENTS OF THE PARTIES. THERE ARE
NO UNWRITTEN ORAL AGREEMENTS BETWEEN THE PARTIES.
SECTION 10.21 ANNUAL RATES OF INTEREST. For the purposes of the
Interest Act (Canada), whenever interest payable pursuant to this Agreement is
calculated on the basis of a period other than a calendar year (the "INTEREST
PERIOD"), each rate of interest determined pursuant to such calculation
expressed as an annual rate is equivalent to such rate as so determined
multiplied by the actual number of days in the calendar year in which the same
is to be ascertained and DIVIDED BY the number of days in the Interest Period.
SECTION 10.22 WAIVER OF JUDGMENT INTEREST ACT (ALBERTA). To the extent
permitted by Law, the provisions of the Judgment Interest Act (Alberta) shall
not apply to the Loan Documents and are hereby expressly waived by Borrower.
SECTION 10.23 DEEMED REINVESTMENT NOT APPLICABLE. For the purposes of
the Interest Act (Canada), the principle of deemed reinvestment of interest
shall not apply to any interest calculation under the Loan Documents, and the
rates of interest stipulated in this Agreement are intended to be nominal rates
and not effective rates or yields.
[SIGNATURES BEGIN ON FOLLOWING PAGE]
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IN WITNESS WHEREOF, the parties hereto have caused this
Agreement to be executed by their respective officers thereunto duly authorized
as of the day and year first above written.
MARKWEST RESOURCES CANADA CORP.
By:
---------------------------------------------
Gerald A. Tywoniuk
Vice President, Finance
Address for Notices: 1340, 734 - 7th Avenue S.W.
Calgary, Alberta
T2P 3P8
Telephone No: (403) 508-7410
Facsimile No.: (403) 508-5285
Attention: Chief Executive Officer
with a copy to:
Address for Notices: 155 Inverness Drive West
Suite 200
Englewood, Colorado 80112
Telephone No.: (303) 290-8700
Facsimile No.: (303) 290-8769
Attention: Contract Administrator
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BANK OF AMERICA CANADA,
as Canadian Administrative Agent
By:
---------------------------------------------
Name:
-------------------------------------------
Title:
------------------------------------------
Address for Notices: 200 Front Street West
Suite 2700
Toronto, Canada M5V 3L2
Telephone No.: 416-349-5433
Facsimile No.: 416-349-4283
Attention: Ms. Medina Sales de Andrade
with a copy to:
Bank of America, N.A.
333 Clay Street, Suite 4550
Houston, Texas 77002
Telephone No.: (713) 651-4850
Facsimile No.: (713) 651-4841
Attention: Mr. Richard L. Stein
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LENDERS
BANK OF AMERICA CANADA
By:
---------------------------------------------
Name:
-------------------------------------------
Title:
------------------------------------------
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U.S. BANK, NATIONAL ASSOCIATION
By:
---------------------------------------------
Name:
-------------------------------------------
Title:
------------------------------------------
S-4